[Senate Report 108-421]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                                 SENATE                          
 2d Session                                                     108-421
_______________________________________________________________________

                                     




          ACTIVITIES OF THE COMMITTEE ON GOVERNMENTAL AFFAIRS


                               __________

                              R E P O R T

                                 of the

         COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE

                                and its

                             SUBCOMMITTEES

                                for the

                      ONE HUNDRED SEVENTH CONGRESS






                December 7, 2004--Ordered to be printed



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                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania          RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah              THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois        MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire        FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama           MARK PRYOR, Arkansas

           Michael D. Bopp, Staff Director and Chief Counsel
                  Ann C. Fisher, Deputy Staff Director
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                   Holly A. Idelson, Minority Counsel
                      Amy B. Newhouse, Chief Clerk

COMMITTEE ON GOVERNMENTAL AFFAIRS DURING THE 107TH CONGRESS UNTIL JUNE 
                              6, 2001 \1\

                   FRED THOMPSON, Tennessee, Chairman
            JOSEPH I. LIEBERMAN, Connecticut, Ranking Member
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              DANIEL K. AKAKA, Hawaii
GEORGE V. VOINOVICH, Ohio            RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico \2\     ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi            MAX CLELAND, Georgia
JUDD GREGG, New Hampshire            THOMAS R. CARPER, Delaware
ROBERT F. BENNETT, Utah              JEAN CARNAHAN, Missouri

                                 ------                                

                  SUBCOMMITTEES OF THE 107TH CONGRESS
      INTERNATIONAL SECURITY, PROLIFERATION, AND FEDERAL SERVICES

                  THAD COCHRAN, Mississippi, Chairman
                DANIEL K. AKAKA, Hawaii, Ranking Member
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              ROBERT G. TORRICELLI, New Jersey
PETE V. DOMENICI, New Mexico \2\     MAX CLELAND, Georgia
JUDD GREGG, New Hampshire            THOMAS R. CARPER, Delaware
ROBERT F. BENNETT, Utah              JEAN CARNAHAN, Missouri

                                 ------                                

 OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING AND THE DISTRICT OF 
                                COLUMBIA

                  GEORGE V. VOINOVICH, Ohio, Chairman
              RICHARD J. DURBIN, Illinois, Ranking Member
TED STEVENS, Alaska                  DANIEL K. AKAKA, Hawaii
SUSAN M. COLLINS, Maine              ROBERT G. TORRICELLI, New Jersey
PETE V. DOMENICI, New Mexico \2\     THOMAS R. CARPER, Delaware
THAD COCHRAN, Mississippi            JEAN CARNAHAN, Missouri

                                 ------                                

                PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

                   SUSAN M. COLLINS, Maine, Chairman
                  CARL LEVIN, Michigan, Ranking Member
TED STEVENS, Alaska                  DANIEL K. AKAKA, Hawaii
GEORGE V. VOINOVICH, Ohio            RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico \2\     ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi            MAX CLELAND, Georgia
JUDD GREGG, New Hampshire            THOMAS R. CARPER, Delaware
ROBERT F. BENNETT, Utah              JEAN CARNAHAN, Missouri

\1\ Senator Lieberman was Chairman from January 3, 2001 until January 
20, 2001, when Senator Thompson became Chairman. On June 6, 2001, 
Senator Lieberman became Chairman for the remainder of the 107th 
Congress.
\2\ Senator Domenici left the Committee and Senator Fitzgerald replaced 
him on April 23, 2002.
COMMITTEE ON GOVERNMENTAL AFFAIRS DURING THE 107TH CONGRESS AS OF JUNE 
                              6, 2001 \1\

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 FRED THOMPSON, Tennessee
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
RICHARD J. DURBIN, Illinois          SUSAN M. COLLINS, Maine
ROBERT G. TORRICELLI, New Jersey     GEORGE V. VOINOVICH, Ohio
MAX CLELAND, Georgia                 THAD COCHRAN, Mississippi
THOMAS R. CARPER, Delaware           ROBERT F. BENNETT, Utah
JEAN CARNAHAN, Missouri              JIM BUNNING, Kentucky
MARK DAYTON, Minnesota               PETER G. FITZGERALD, Illinois \2\

                                 ------                                

                  SUBCOMMITTEES OF THE 107TH CONGRESS
      INTERNATIONAL SECURITY, PROLIFERATION, AND FEDERAL SERVICES

                   DANIEL K. AKAKA, Hawaii, Chairman
CARL LEVIN, Michigan                 THAD COCHRAN, Mississippi
ROBERT G. TORRICELLI, New Jersey     TED STEVENS, Alaska
MAX CLELAND, Georgia                 SUSAN M. COLLINS, Maine
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
JEAN CARNAHAN, Missouri              ROBERT F. BENNETT, Utah
MARK DAYTON, Minnesota               PETER G. FITZGERALD, Illinois

                                 ------                                

 OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING AND THE DISTRICT OF 
                                COLUMBIA

                 RICHARD J. DURBIN, Illinois, Chairman
DANIEL K. AKAKA, Hawaii              GEORGE V. VOINOVICH, Ohio
ROBERT G. TORRICELLI, New Jersey     TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           SUSAN M. COLLINS, Maine
JEAN CARNAHAN, Missouri              THAD COCHRAN, Mississippi
MARK DAYTON, Minnesota               PETER G. FITZGERALD, Illinois

                                 ------                                

                PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

                     CARL LEVIN, Michigan, Chairman
DANIEL K. AKAKA, Hawaii              SUSAN M. COLLINS, Maine
RICHARD J. DURBIN, Illinois          TED STEVENS, Alaska
ROBERT G. TORRICELLI, New Jersey     GEORGE V. VOINOVICH, Ohio
MAX CLELAND, Georgia                 THAD COCHRAN, Mississippi
THOMAS R. CARPER, Delaware           ROBERT F. BENNETT, Utah
JEAN CARNAHAN, Missouri              JIM BUNNING, Kentucky
MARK DAYTON, Minnesota               PETER G. FITZGERALD, Illinois

\1\ Senator Lieberman became Chairman on June 6, 2001.
\2\ Senator Domenici left the Committee and Senator Fitzgerald replaced 
him on April 23, 2002.


                                CONTENTS

                                 ------                                
                                                                   Page
I. Highlights of Activities......................................     1

    Homeland Security............................................     3

    Commission to Investigate the Terrorist Attacts..............     5

    E-Government and Information Resources Management............     6

    The Collapse of Enron Corporation............................     7

    Government Organization......................................    12

    Regulatory Oversight.........................................    12

    Government Workforce Improvements............................    14

    Financial Management.........................................    15

    Small Business Paperwork Relief..............................    16

    Public Health and Safety.....................................    16

    Election Reform..............................................    16

    Energy Deregulation..........................................    16

    Financial Disclosure for Presidential Nominees...............    17

    D.C. Legislation.............................................    17

    Export Controls..............................................    18

    Monitoring, Accountability and Competition in the Federal and 
      Service Contract Workforce.................................    18

    Entertainment Ratings........................................    18

II. Committee Jurisdiction.......................................    18

III. Bills and Resolutions Referred and Considered...............    19

IV. Hearings.....................................................    19

V. Reports, Prints, Studies, and GAO Reports.....................    40

VI. Official Communications......................................    47

VII. Legislative Actions.........................................    47

    Measures Enacted Into Law....................................    47

    Measures Favorably Reported by Committee and Passed by the 
      Senate.....................................................    65

    Selected Measures Considered by the Committee................    67

VIII. Presidential Nominations...................................    68

IX. Activities of the Subcommittees..............................    72

      International Security, Proliferation, and Federal Services 
                              Subcommittee

I. Hearings......................................................    72

II. Legislation..................................................    81

III. Report and GAO Reports......................................    85

Oversight of Government Management, Restructuring, and the District of 
                         Columbia Subcommittee

I. Hearings......................................................    87

II. GAO Reports..................................................   109

III. Legislation.................................................   110

                Permanent Subcommittee on Investigations

I. Historical Background.........................................   116

II. Subcommittee Hearings During the 107th Congress..............   121

III. Legislation Activities During the 107th Congress............   138

IV. Reports, Prints, and Studies.................................   141

V. Requested and Sponsored Reports From GAO......................   152
108th Congress


108th Congress                                                   Report
                                 SENATE                          
 2d Session                                                     108-421

======================================================================



 
 ACTIVITIES OF THE COMMITTEE ON GOVERNMENTAL AFFAIRS DURING THE 107TH 
                                CONGRESS

                                _______
                                

                December 7, 2004.--Ordered to be printed

                                _______
                                

Ms. COLLINS, from the Committee on Governmental Affairs, submitted the 
                               following

                                 REPORT

    This report reviews the legislative and oversight 
activities of the Committee on Governmental Affairs during the 
107th Congress. These activities parallel the broad scope of 
responsibilities vested in the Committee by the Legislative 
Reorganization Act of 1946, as amended, rule XXV(k) of the 
Standing Rules of the Senate, and additional authorizing 
resolutions. Senator Thompson was Chairman of the Committee at 
the outset of the 107th Congress. In June 2001, majority 
control of the Senate changed hands and Senator Lieberman 
served as Chairman for the remainder of the Congress.

                      I. Highlights of Activities

    In the 107th Congress, the Senate Committee on Governmental 
Affairs responded quickly and decisively to the crisis 
occasioned by the devastating terrorist attacks of September 
11, 2001. The Committee was uniquely qualified to shape the 
government's organizational response to the terrorist threat, 
both because of its jurisdiction over government 
reorganization, and because of its experience addressing a 
broad variety of Executive Branch management challenges. The 
result of the Committee's efforts was landmark legislation 
signed into law that fundamentally reorganized the Federal 
Government to meet the threat of terrorism and other threats to 
our homeland security--the Federal Government's most 
significant reorganization in a half century. For the first 
time, a new Department has as its primary mission protecting 
the American homeland from a variety of threats, the foremost 
of which is a terrorist attack. If fully and effectively 
implemented, the legislation will greatly enhance our 
government's capacity to deal with threats to our homeland.
    In the months after the September 11 attacks, the Committee 
engaged in vigorous oversight of the state of the Nation's 
ability to prevent, protect against and respond to a terrorist 
attack. Hearings probed the organization and vulnerabilities of 
many aspects of our government's operations and examined 
possible solutions. One month after the September 11 attacks, 
Chairman Lieberman and Senator Specter introduced a bill to 
create a new Department of Homeland Security to reorganize the 
Federal Government's dispersed and dysfunctional domestic 
defense programs into a consolidated Department of Homeland 
Security led by a Secretary accountable to the American people. 
The proposal (twice approved by the Committee) evolved through 
the contributions of other Members of the Committee, other 
Senators, and, ultimately, the Administration. After a vigorous 
Senate debate on the legislation, in which Chairman Lieberman 
and Ranking Minority Member Thompson served as floor managers, 
the legislation to create a new Department was enacted as the 
Homeland Security Act of 2002 (H.R. 5005, Public Law 107-296).
    Chairman Lieberman also introduced, and the Committee 
approved, legislation to establish an independent commission to 
investigate the specific facts and circumstances of the 
terrorist attacks, and to make recommendations based on the 
commission's conclusions (S. 1867). That legislation also 
passed at the end of the Congress, as part of the Intelligence 
Reauthorization Act of 2002 (Public Law 107-306).
    The Committee also continued to pursue its wide reaching 
legislative and oversight mandates to promote the operation of 
an efficient and effective government, and to ensure the 
vigorous implementation of the Nation's laws by the Executive 
Branch. The Committee developed, approved, and ultimately saw 
signed into law historic legislation harnessing modern 
information technology to make government more professional and 
proficient in serving the people--The E-Government Act of 2001 
(S. 803; Public Law 107-347). This legislation to promote 
electronic government included a variety of important new 
information management provisions that promoted the 
government's use of the Internet and new information 
technologies, and improved information dissemination, 
information security, and training for information technology 
workers. Laws mandating more rigorous financial management by 
Federal agencies were reported by the Committee and enacted 
into law (S. 2644 and H.R. 4685, Public Law 107-289; H.R. 4878, 
Public Law 107-300). Provisions improving management of the 
Federal workforce and providing for emergency procurement 
flexibility passed as part of the Homeland Security Act of 2002 
(Public Law 107-296; Title XIII and Title VIII, Subtitle F).
    The Committee balanced these landmark legislative efforts 
with important investigative and oversight work scrutinizing 
the independence and effectiveness of those responsible for 
overseeing the Nation's financial and energy markets, which 
were scarred broadly and deeply by the scandalous collapse of 
Enron Corporation in December 2001. In January 2002, Chairman 
Lieberman and Ranking Minority Member Thompson launched a far-
reaching investigation into the role of these watchdogs in 
Enron's implosion, with the goal of determining where the 
system failed investors in order to prevent a similar debacle 
from recurring. At the same time, Senators Levin and Collins, 
through the Permanent Subcommittee on Investigations, conducted 
a bipartisan investigation into issues related to the collapse 
of Enron Corporation. The full Committee also conducted 
extensive investigations into the Administration's rollback of 
environmental regulations, and probed the energy markets, 
election reform, DC voting rights, and a variety of other 
issues.

                           HOMELAND SECURITY

    In response to the devastating terrorist attacks of 
September 11, 2001, the Committee engaged in a lengthy and 
detailed oversight process into how to strengthen homeland 
security. Informed by that process, Chairman Lieberman 
introduced and moved through the Committee and to the Senate 
floor legislation to create a new Department of Homeland 
Security (S. 2452). The Homeland Security Act of 2002, 
ultimately enacted as H.R. 5005, consolidates myriad agencies 
with responsibilities for homeland security into a single 
Department. As a result of this legislation, for the first time 
a new Department will have as its primary mission defending the 
American homeland against a variety of threats, the foremost of 
which is terrorist attacks.
    Beginning on September 12, 2001, the Committee held a total 
of 19 hearings on homeland security. Four of the hearings 
focused specifically on how government can best be organized to 
meet the threat of terrorism on our homeland. The rest of the 
hearings addressed particular homeland security concerns, and 
also informed the process by which Chairman Lieberman and 
others drafted and revised comprehensive legislation to create 
a Department of Homeland Security. These hearings began on 
September 12, 2001, with the first of three sessions on 
critical infrastructure protection, and continued through June 
26-28, 2002, with 2 days of hearings into the role of the 
intelligence community in homeland security, and a third 
hearing into protecting against weapons of mass destruction. 
Other hearings addressed aviation security, bioterrorism, mail 
safety, port security, the role of State and local governments 
in homeland security, rail safety, and public health 
preparedness.
    The hearings on specific proposals for government 
reorganizations began on September 21, 2001, when former 
Senators Hart and Rudman described how their United States 
Commission on National Security/21st Century, in a report 
entitled ``Road Map for National Security: Imperative for 
Change,'' had found that the government was woefully unprepared 
for terrorist attacks, and recommended the creation of a new 
Department to provide for a more coordinated defense against 
attacks on United States territory. Soon after, on October 11, 
2001, Senators Lieberman and Specter introduced legislation to 
create a new Department (S. 1534), modeled after the Hart-
Rudman recommendations. At a hearing the next day, the 
Committee examined this and other legislative proposals, 
including one put forward by Senator Graham (S. 1449) to 
establish a National Office for Combating Terrorism. At a third 
hearing, on April 11, 2002, the Committee examined draft 
legislation that synthesized and expanded upon the legislative 
approaches taken in the Lieberman-Specter and Graham proposals. 
The integrated bill, S. 2452, was ordered reported out of the 
Committee on May 22, 2002, and reported to the Senate on June 
24, 2002 (S. Rept. 107-175).
    Before the Senate had a chance to consider the Committee's 
homeland security bill, the President--in June 2002--drafted 
proposed legislation to create a Department of Homeland 
Security. At a hearing on June 20, 2002, the Committee compared 
the President's proposal to the legislation the Committee had 
already reported out (S. 2452). The Administration's bill 
included almost all of S. 2452's organizational elements 
regarding the Department but offered additional provisions, 
such as allowing the Department's management to establish a new 
personnel system, and turning over broad authority to the 
Executive Branch in a number of areas, including appropriations 
and reorganization of agencies and programs within the 
Department. The Administration's bill also did not include a 
statutory White House office on combating terrorism.
    On July 24 and 25, 2002, the Committee held a business 
meeting to consider an amended version of the Committee-
approved homeland security legislation that contained many of 
the Administration's suggestions on organizational structure. 
The business meeting also gave Committee members the 
opportunity to offer and vote on a wide variety of amendments. 
The Committee considered 40 first-degree amendments and adopted 
31 of them. The modified version of S. 2452 was approved on a 
bipartisan vote of 12-5; it became the basis for Senate floor 
debate, which began in September 2002.
    The legislation created a Department of Homeland Security 
led by a Presidentially-appointed, Senate-confirmed Secretary 
and divided into six major divisions or directorates. Each 
directorate had a core mission of the Department: (1) shoring 
up our borders and transportation system; (2) preparing for and 
responding to emergencies; (3) protecting our infrastructure; 
(4) fusing intelligence; (5) improving immigration security; 
and (6) coordinating and promoting science and technology 
research and development for homeland security. The bill 
proposed to combine more than two dozen Federal agencies and 
offices with homeland security missions, such as the Coast 
Guard, the Customs Service, the Federal Emergency Management 
Agency, the Transportation Security Administration, the border 
inspection functions of the Department of Agriculture's Animal 
and Plant Health Inspection Service, and several other critical 
agencies and offices, into a unified cabinet-level Department. 
It also included long-sought reforms of the Immigration and 
Naturalization Service by creating a bureau of immigration 
services and a bureau of enforcement and border affairs within 
an overall immigration directorate. Finally, it incorporated 
far-reaching bipartisan, consensus civil service reforms 
drafted by Senators Voinovich and Akaka that require the 
appointment of chief human capital officers, reform the 
competitive hiring process, improve performance management 
within the Senior Executive Service, and afford other tools for 
improving human capital management government-wide.
    In September and October of 2002, Chairman Lieberman and 
Ranking Minority Member Thompson led the debate on the floor of 
the Senate regarding many aspects of the Committee's 
legislation. Among the most disputed issues were the 
Administration's efforts to establish a new personnel system 
for employees of the new Department, including a new system for 
labor relations, and to seek new authorities in a number of 
other managerial areas. The Administration believed that the 
Secretary of the new Department needed flexibility to set the 
rules regarding Department personnel, while others argued that 
the Administration provisions would alter procedures and 
remedies in a way that could undermine merit system principles 
and were unrelated to national security needs. Other debate 
centered around the inclusion in the legislation of a White 
House Terrorism Office with a Senate-confirmed Director, and an 
alternative amendment offered by Senator Byrd that would have 
established the Department more gradually. Senators Gramm and 
Miller offered their own version of the homeland security 
legislation as an amendment. Repeated attempts to achieve 
cloture on the legislation were unsuccessful.
    On November 13, 2002, the House passed new legislation 
(H.R. 5710) to establish a Department of Homeland Security that 
included some of the Administration supported provisions on 
personnel matters and other issues, although with some 
significant modifications from the President's original June 
18, 2002 proposal. The same day, the Senate tabled the 
Committee-approved version of the homeland security legislation 
on a 50-47 vote. Several days later, on November 19, 2002, the 
Senate essentially adopted the text of H.R. 5710 and, after 
more than 2 months of floor debate on the legislation, the 
Senate passed the legislation to create a Department of 
Homeland Security by a vote of 90-9. The House agreed to the 
Senate amendment by unanimous consent on November 22, 2002. 
President Bush signed the Homeland Security Act of 2002 (H.R. 
5005) into law on November 25, 2002 (Public Law 107-296).
    Although it contained alternative provisions on personnel 
management and organizational authority, the version of H.R. 
5005 that was ultimately enacted is very similar in its 
organizational components to the legislation that was approved 
by the Committee and will focus leadership and resources on key 
areas for securing our homeland by creating directorates within 
the Department for: (1) information analysis and infrastructure 
protection; (2) border and transportation security; (3) 
emergency preparedness and response; and (4) science and 
technology. Other key elements of the Department include an 
Office for State and Local Government Coordination, a separate 
bureau for immigration and citizenship services, and officers 
devoted to civil rights and civil liberties and to privacy. 
Under this configuration, immigration, customs and agricultural 
border inspectors for the first time will operate within a 
single chain of command; diverse programs on cyber-security and 
critical infrastructure protection will be coordinated within a 
single directorate, which should also include an intelligence 
fusion center to analyze all homeland threats; emergency 
response programs will be coordinated with homeland security 
planning; and a new science and technology capability will 
advance the research and development agenda of the host of 
agencies with homeland security missions. The Secretary of the 
new Department will have authority to focus and lead the 
Nation's homeland security efforts.

            COMMISSION TO INVESTIGATE THE TERRORIST ATTACKS

    Although the terrorist attacks of September 11, 2001 caused 
tremendous carnage and loss of life, as of late 2002 no 
official governmental inquiry had been established to 
comprehensively examine the tragedy. This despite the fact that 
such investigations are routinely conducted after plane crashes 
and terrorist attacks against U.S. Government facilities.
    On December 20, 2001, Senators Lieberman and McCain 
introduced legislation calling for the establishment of an 
independent inquiry to investigate the terrorist attacks of 
September 11, 2001. The legislation, S. 1867, was referred to 
the Committee. It required the creation of a non-partisan, 
blue-ribbon commission to produce a definitive report detailing 
how our government failed to detect the plot and protect the 
homeland, and recommending how our Nation's defenses against 
terrorism could be improved. The proposal set a broad scope for 
the Commission, extending its jurisdiction to all relevant 
areas, including the private sector and State and local 
governments. It gave the Commission subpoena power, and 
required it to report its findings within 18 months.
    On February 7, 2002, Chairman Lieberman held a Committee 
hearing on the commission legislation. Four witnesses, who had 
served on past commissions, testified in support of the bill. 
On March 21, 2002, the Committee unanimously ordered the bill 
reported to the full Senate. On September 24, 2002, the Senate 
overwhelmingly voted to create a commission as an amendment to 
the Homeland Security legislation; earlier, the House of 
Representatives had voted for a narrower inquiry as part of 
intelligence reauthorization legislation. In conference, the 
House and Senate Intelligence Committees agreed to establish a 
commission similar to the version that had passed the Senate, 
as part of the Intelligence Reauthorization Act (Public Law 
107-306). The legislation was enacted on November 27, 2002. The 
Commission, led by Chairman Thomas Kean and Vice-Chair Lee 
Hamilton, began its work in January 2003.

           E-GOVERNMENT AND INFORMATION RESOURCES MANAGEMENT

    The 107th Congress passed important new legislation to 
promote next generation government. The passage of Chairman 
Lieberman's ``E-Government Act of 2002'' represented the 
culmination of 3 years of work by the Committee. The 
legislation will improve the organization and delivery of 
information and services over the Internet, and will establish 
a new information resources management framework to transform 
the way government operates.
    Senator Lieberman introduced the E-Government Act of 2001 
(S. 803) on May 1, 2001. The Committee held a hearing on the 
legislation on July 11, 2001. On March 21, 2002, the Committee 
unanimously ordered reported an amended version, and the bill 
passed the Senate by unanimous consent on June 27, 2002. In 
September, the House Government Reform Committee began to 
consider the legislation; an agreement was reached between the 
House and Senate Committees in which several provisions were 
added, but the original Senate provisions were left intact. The 
revised legislation passed the House and Senate as H.R. 2458 on 
November 15, 2002; the President signed it on December 17, 2002 
(Public Law 107-347).
    The E-Government Act of 2002, among other things, creates 
an Office of Electronic Government within OMB headed by a 
Presidentially-appointed Administrator, to provide focused, top 
level-leadership on e-government and information technology 
issues. The Administrator will allocate money from a 
substantial E-Government Fund to support interagency projects 
and other innovative programs. The Act requires that 
information and services on the Internet be organized according 
to citizens' needs, rather than agency jurisdiction, and 
accessible from a single point, or portal. Several provisions 
require that government information be better organized and 
made more easily searchable.
    Sweeping new privacy protections require government 
officials to consider privacy ramifications when developing 
information technology systems or beginning information 
collections. Federal agencies are required to post their 
website privacy policies in machine readable formats, making it 
easier for individuals' Internet browsers to access and screen 
them. The privacy provisions represent one of the most 
significant expansions of individuals' privacy protections 
since the passage of the 1974 Privacy Act.
    The Act also addresses an impending shortage of skilled 
information technology professionals in the Federal workforce; 
requires agencies to conduct their rule-making online; and 
directs courts to post their judicial opinions and other 
information online.
    The Act authorizes and makes permanent the information 
security provisions originally authored by Senators Thompson 
and Lieberman in the 106th Congress (Public Law No. 106-398); 
the provisions appearing in the final bill were expanded upon 
with the addition of House legislation, the Federal Information 
Security Management Act. The Act also improves Federal agency 
information security by authorizing funds for the development 
of a Federal bridge certification authority for digital 
signature compatibility.
    The Act includes a modified version of the ``Digital Tech 
Corps Act of 2002,'' introduced in the Senate by Senator 
Voinovich (S. 1913) and in the House by Representative Tom 
Davis (H.R. 3925) (first introduced as H.R. 2678, then as H.R. 
3925). The provision authorizes the exchange of information 
technology workers between the private sector and Federal 
Government agencies. Other language added by the House included 
an expansion of share-in-savings contracting authority, and an 
authorization for State and local governments to purchase 
information technology off the Federal supply schedule.

                   THE COLLAPSE OF ENRON CORPORATION

    On December 2, 2001, Enron Corp., then ranked as America's 
seventh largest company, filed for bankruptcy amid allegations 
of wide-ranging fraud. The collapse of the company left 
thousands of employees without jobs; it also erased billions of 
dollars of savings for many of those employees and many more 
investors. Enron's collapse, moreover, triggered a crisis of 
confidence in the U.S. financial markets, which was sustained 
by the parade of corporate debacles that followed--WorldCom, 
Global Crossing, and Tyco, among others.
    In January 2002, the Committee began a broad investigation 
into Enron's failure. Specifically, the Committee examined a 
variety of government and private entities with responsibility 
for overseeing or monitoring aspects of Enron's activities and 
protecting the public against the type of disaster that 
resulted. The Chairman asked Committee staff to determine 
whether these watchdogs could have done anything to prevent, or 
at least detect earlier, the problems that led to Enron's 
collapse.
    At the same time, the Committee's Permanent Subcommittee on 
Investigations undertook a parallel investigation into how 
Enron was governed and the accounting ploys and other 
mechanisms it had used to improve the appearance of its 
financial statements. In particular, the Subcommittee looked at 
the role of Enron's Board of Directors in the company's 
collapse and at the ways in which certain large financial 
institutions assisted Enron in structuring questionable, highly 
complex transactions designed to hide debt and to increase the 
appearance of the company's revenues.
    Starting in February 2002, the Committee sought information 
from a number of government agencies about their contacts with 
and oversight of Enron, including the Securities and Exchange 
Commission, the Federal Energy Regulatory Commission (FERC), 
the Commodity Futures Trading Commission, the Department of 
Labor, the Department of Energy and the Commerce Department. 
The Committee also requested information regarding contacts 
with Enron from the ten agencies whose leaders served as 
members of the National Energy Policy Task Force headed by Vice 
President Cheney. In addition, the Committee requested 
information from the Archivist of the United States regarding 
contacts with Enron by prior White House administrations, going 
back to January 1, 1992. The Committee sought similar 
information from the current White House; when it was not 
forthcoming, the Committee subpoenaed the materials containing 
that information on May 22, 2002. On the same date the 
subpoenas were issued, the White House provided the Committee 
with, and for the first time made public, an extensive list of 
contacts between Enron officials and the staffs of the 
Executive Office of the President and the Office of the Vice 
President. The Committee also subpoenaed documents from Enron, 
current and former directors of Enron, and Enron's auditor 
Arthur Andersen regarding, among other things, Enron's contacts 
with the government.
    As part of its investigation, the Committee held a series 
of hearings that looked at the actions of certain private and 
public watchdogs with respect to Enron, as well as at issues 
arising out of the disastrous effect that Enron's collapse had 
on its employees' 401(k) retirement plans.
    In addition, Chairman Lieberman and Ranking Minority Member 
Thompson released a number of staff reports on various aspects 
of the Committee's investigation. The first of those was a 101-
page report prepared by Committee staff (Financial Oversight of 
Enron: The SEC and Private-Sector Watchdogs, S. Prt. 107-75 
(October 7, 2002)) that set forth a summary of findings and 
recommendations relating to the Committee's investigation of 
both public and private sector financial oversight of Enron, 
particularly by the SEC, the stock analysts, and the credit 
rating agencies. The report detailed a story of systemic 
failure by the watchdogs relied upon by the public to properly 
discharge their appointed roles. The report concluded that, 
despite the magnitude of Enron's implosion and the apparent 
pervasiveness of its fraudulent conduct, virtually no one in 
the multilayered system of controls that the public relies upon 
detected Enron's malfeasance, or, if they did detect it, did 
anything to alert investors or correct the problems. The report 
included specific recommendations to the SEC.

       The SEC. Staff found that the SEC failed to review 
Enron's filings consistently or thoroughly and that, if the 
Commission had done so, it might have raised red flags about 
some of the company's most troubling transactions. The report 
also found that the SEC staff had made administrative 
determinations that allowed Enron to engage in certain 
accounting practices and exempted the company from certain 
regulatory requirements. The SEC then failed to monitor whether 
Enron was abiding by conditions the SEC set in making these 
allowances, and failed to check to see if the circumstances 
that warranted the exemption had changed. The report called 
upon the SEC to improve its performance by being more diligent 
and consistent in reviewing corporate filings, devising 
effective criteria to root out financial fraud, and leveraging 
technology to better achieve this goal. The report also 
recommended the SEC make further efforts to follow up on its 
own administrative orders, grants and exemptions to ensure that 
they are being complied with and that they remain warranted.

       Stock Analysts. The report examined how stock analysts 
could have continued to recommend Enron's stock to investors 
until the company's end. The report concluded that Wall Street 
analysts are subject to too many pressures and conflicts to 
offer the objective and hard-hitting analyses that the 
investing public demands of them. The most significant source 
of pressure on analysts is the investment banking relationship 
between the companies they cover and the firms for which they 
work; Enron, in particular, was an active customer of 
investment banking services, and in at least one case appears 
to have used the threat of withdrawing that business to produce 
a better rating from an analyst than it would otherwise have 
received. The report recommended, among other reforms, that the 
SEC tighten regulatory requirements for stock analysts, 
mandating that they be entirely separated and insulated from 
the contaminating influence of the investment banking interests 
of the firms for which they work.

       Credit Rating Agencies. The report also looked into how 
credit rating agencies could have kept Enron's credit rating at 
investment grade--meaning a safe investment--until just 4 days 
before Enron declared bankruptcy. The report found that credit 
rating agencies failed to leverage their power and access to 
benefit investors. The rating agencies appeared to take at face 
value whatever Enron told them, and did not probe for more 
information when Enron's silence concealed potentially damaging 
facts. The report recommended that the SEC set standards for 
the rating agencies' work, monitor to ensure that they operate 
in compliance with those standards, and then investigate when 
ratings significantly understate risks, as in the case of 
Enron.

    On November 12, 2002, Chairman Lieberman also released a 
Majority staff memorandum addressing FERC's failure to monitor 
aggressively the deregulated energy markets that Enron 
allegedly abused, in conjunction with the Committee's hearing 
on that topic (Asleep at the Switch: FERC's Oversight of Enron 
Corporation, Hearing Before the Senate Governmental Affairs 
Committee, (S. Hrg. 107-854, November 12, 2002, Vol. I at p. 
220).) The Majority staff memorandum found that FERC repeatedly 
failed to ask critical questions about Enron's business 
practices--questions that might have exposed the fissures in 
Enron's fiscal foundation sooner, limited some of the abuses 
that occurred, raised larger questions about Enron's trading 
practices, and spared investors, employees, and consumers some 
of the pain they later endured. The report found a shocking 
absence of regulatory vigilance on FERC's part and a failure to 
structure the agency to meet the demands of the new, market-
based system that the agency itself had championed. The 
investigation revealed that FERC did not fulfill its role to 
protect consumers against abuses that can result if a market-
based system is not adequately regulated by those charged with 
doing so. Specifically, the investigation looked at four areas 
in which FERC had failed to adequately oversee Enron Corp.:

       Wind Farm Transactions. The investigation uncovered a 
number of misdeeds in connection with certain wind farms owned 
by Enron. Under Federal law, the wind farms were potentially 
eligible for special rate treatment--that is, consumers could 
be charged a higher price for the electricity they generated, 
but only if the wind farms were not owned by a public utility 
or any owner of a public utility--which Enron was. Enron filed 
documents with FERC asserting, first, that it had sold 50 
percent of its interests in the wind farms, and, later, that it 
qualified for an exemption from the law. Although both 
assertions turned out to be untrue (among other things, the 
sales of Enron's interests turned out largely to be sham 
sales), FERC never scrutinized Enron's filings to see if the 
claims were supported. Instead FERC let Enron continue to 
charge the higher, preferential rates. Only after the 
Committee's investigation did FERC open its own investigation 
into the wind farms--which ultimately led to a settlement that 
will return over $50 million to California ratepayers.

       Enron Online. In May 2001--7 months before Enron 
declared bankruptcy--FERC staff conducted an investigation into 
Enron Online, Enron's electronic trading platform. The inquiry 
included an examination of the competitive advantage Enron 
Online provided Enron traders and whether that advantage could 
be used by Enron to gain an unfair advantage in the 
marketplace. But the Committee staff's report found that while 
FERC staff members asked some of the right questions, they 
failed to follow up on some of the most serious concerns raised 
and ultimately settled for incomplete, unconvincing or 
incorrect answers. It was not until March 2003--well after 
Enron's collapse--that FERC issued a staff report concluding 
that Enron had in fact used Enron Online to manipulate the 
Western energy markets and make significant additional profits 
for the company.

       Affiliate Transactions. Enron engaged in a number of 
inappropriate transactions among its many affiliates. In 
perhaps the most striking of these interaffiliate transactions, 
Enron, shortly before its collapse, borrowed $1 billion through 
two of its pipeline subsidiaries. The FERC-regulated pipelines 
subsidiaries secured the loans with their assets and in turn 
made unsecured loans to the parent company. When Enron declared 
bankruptcy, the pipeline companies (which did not themselves 
file for bankruptcy) were left to pay off the debt, with 
significant potential consequences for their ratepayers. A 
subsequent investigation, begun some months later by FERC, 
challenged the right of the pipelines to pass these costs on to 
their ratepayers, but the Committee staff's report showed that 
FERC's modest regulation in this area had failed to prevent 
these and other questionable transactions from occurring in the 
first place.

       Abusive Trading Practices During the Western Energy 
Crisis. Publicly released documents show that Enron traders 
engaged in abusive trading practices designed to manipulate the 
market during the 2000-2001 Western energy crisis. The 
Committee's investigation found that FERC, however, waited 2 
years after the first allegations of market abuse arose--and 
until after Enron's collapse--before beginning a formal inquiry 
into the potentially abusive actions of individual companies. 
The majority staff further found that this action came at the 
same time that Enron, concerned about the future of energy 
deregulation, was conducting an extensive public relations and 
lobbying campaign to influence FERC's actions in California and 
the Western markets. It was not until March 2003 that FERC 
finally released a staff report concluding that Enron and a 
number of other energy companies had in fact manipulated the 
Western markets.

    In sum, the majority staff's report found that FERC had 
displayed a shocking absence of regulatory vigilance in its 
oversight of Enron. Based on its findings, the Majority staff 
recommended that FERC take significant steps to restructure and 
reorient the agency to more effectively oversee the new 
competitive markets it has championed, including reorienting 
its mission toward more proactive oversight and enforcement; 
reallocating its resources toward monitoring and policing the 
energy markets; making coordination with other agencies an 
institutional priority; and improving its internal 
communication and coordination practices.
    Ranking Minority Member Thompson released minority views on 
FERC and its oversight of Enron Corp. (November 12, 2002) (S. 
Hrg. 107-854, Vol. IV at p. 682). The minority views asserted 
that, while FERC may have had a previous record of failure, a 
number of positive developments had occurred at the agency 
since the current FERC Chairman had taken office 18 months 
earlier. These actions included proposed rules for regulating a 
deregulated, market-based system, and the creation of an office 
of market oversight and investigation--designed to prevent a 
recurrence of the problems highlighted by the Enron debacle.
    Finally, on January 3, 2003, Chairman Lieberman and Ranking 
Minority Member Thompson released a staff report on the 
Committee's staff investigation into concerns about telephone 
calls made by certain banks to governmental officials, 
purportedly in an effort to obtain government intervention with 
the Moody's credit rating agency, which was threatening to 
downgrade Enron's credit rating in early November 2001 (Enron's 
Credit Rating: Enron's Bankers' Contacts with Moody's and 
Government Officials, Report of the Staff of the Senate 
Committee on Governmental Affairs, S. Prt. 107-83). The report 
concluded that no improper influence was brought to bear by 
government officials on Moody's, and that the bankers who 
contacted government officials regarding Enron and its credit 
rating did not act contrary to law.

                        GOVERNMENT ORGANIZATION

    The Committee continued to review proposals relevant to the 
organization of the Federal Government. Two of the proposals 
considered in the 107th Congress related to the government's 
structure of offices and agencies dedicated to environmental 
protection.
    The Committee debated and endorsed a significant measure to 
strengthen the Federal Government's efforts to combat global 
climate change. ``Climate Change Strategy and Technology 
Innovation Act of 2001'' (S. 1008) was introduced June 8, 2001 
by Senator Byrd and co-sponsored by Senators Stevens, 
Rockefeller, Collins, Reid, Lieberman, Nelson, Voinovich, 
DeWine, Durbin, and Kerry; the bill was referred to the 
Committee. The legislation would have created an Office on 
Climate Change within the White House and required the office 
to prepare a detailed strategy to stabilize the concentration 
of greenhouse gasses in the atmosphere. The legislation also 
sought to create a new office within the Department of Energy, 
with new funding, to research and develop technologies to 
combat climate change. As Senator Byrd stated, ``the 
legislation would establish a regime of responsibility and 
accountability in the Federal sector for the development of a 
national climate change response strategy.'' (Congressional 
Record, June 8, 2001, at S 6002)
    At a July 18, 2001 hearing, the Committee heard testimony 
about the growing threat of climate change and the need for a 
more unified and active effort by the Federal Government to 
combat this threat. The Committee subsequently approved the 
legislation by voice vote on August 2, 2001. S. 1008 did not 
progress further in the 107th Congress. A similar version of 
the legislation was approved by the Senate as part of omnibus 
energy legislation (S. 517); however, that omnibus energy 
package did not become law.
    The Committee also held a hearing on July 24, 2001, to 
consider legislation, introduced by Senator Boxer, and 
cosponsored by Senator Collins and Senator Lieberman, among 
others, to elevate the Environmental Protection Agency to a 
Cabinet-level Department (S. 159).

                          REGULATORY OVERSIGHT

    Investigation and Report on Regulatory Rollbacks: As part 
of the Committee's implementation of its mandate to oversee the 
efficiency and economy of all branches and functions of 
government, with particular references to the operations and 
management of Federal regulatory policies and programs, 
Chairman Lieberman requested information and documents from the 
Environmental Protection Agency (EPA) and the Departments of 
the Interior (DOI) and Agriculture (USDA) regarding their 
consideration of the possibility of delaying, suspending, 
rescinding or otherwise modifying three finalized regulations. 
Following receipt of this information, the Majority staff 
prepared a report for the Chairman, entitled ``Rewriting the 
Rules,'' (S. Prt. 107-76, October 24, 2002).
    The report reviewed the effect of a memo issued by White 
House Chief of Staff Andrew Card, directing Federal agencies to 
hold in abeyance recently issued regulations until they could 
be reviewed by Bush administration political appointees. In 
particular, it examined the so-called Card memo's impact on 
three important environmental rules finalized before the Bush 
Administration came into office: (1) the USDA's rule conserving 
roadless areas in national forests; (2) the DOI's rule 
regulating hard rock mining on public lands; and (3) the EPA's 
rule capping the permissible level of arsenic in drinking 
water.
    The report was critical of the failure of the agencies to 
comply with the notice and comment requirements of the 
Administrative Procedure Act in delaying the rules. Based on a 
review of agency documents, the staff further concluded that 
decisions to revisit the three rules at issue appeared based on 
pre-determined decisions regarding the regulations rather than 
a documented, close analysis of the rules or the agency's basis 
for issuing them. With regard to the rule protecting roadless 
areas in national forests, the staff report concluded that USDA 
used a third-party lawsuit to undermine the rule without taking 
public responsibility for its actions. The staff report 
concluded that DOI's decision to suspend parts of the hard rock 
mining rule will allow mining projects that pose unwarranted 
environmental and health threats to continue. The staff report 
also concluded that EPA conducted a time-consuming and 
unnecessary review of a decades-in-the-making rule limiting 
arsenic in drinking water. Although the EPA Administrator had 
stated concerns about ``sound-bite rulemaking,'' EPA documents 
generated prior to her announcement that the rule would be 
changed reflected no visible comprehensive analysis, work 
product, or narrative identifying the nature of the 
deficiencies in the science supporting the rule.
    The report also noted that the agencies planned further 
changes in each of these rules. Accordingly, the report raised 
the concern that any further actions undertaken by the agencies 
must be in full compliance with the spirit and the letter of 
the law and must not further erode environmental protections or 
rulemaking procedures.
    Hearings on Environmental Oversight and Legislation: The 
Committee held 2 days of hearings, on March 7 and 13 of 2002, 
to examine the Administration's implementation of environmental 
laws. Witnesses included EPA Administrator Christine Todd 
Whitman, Connecticut Attorney General Richard Blumenthal, 
former Director of the Office of Regulatory Enforcement at EPA 
Eric V. Schaeffer, and academics and policy advocates involved 
with environmental issues. Several of the witnesses questioned 
the Administration's commitment to vigorous environmental 
enforcement, or spoke from personal experience of the harm they 
had witnessed from specific acts of environmental degradation. 
EPA's Administrator Whitman testified on behalf of the 
Administration. She called for greater bipartisan cooperation 
on environmental policy, and described the Administration's 
Clear Skies proposal, which she testified was aimed at 
achieving reductions in several air pollutants emitted by power 
plants.

                   GOVERNMENT WORKFORCE IMPROVEMENTS

    The Committee reported out, and Congress enacted, a 
significant number of laws and provisions related to improving 
management of the government workforce, maintaining high 
ethical standards and merit system principles, and enhancing 
benefits for government workers.
    Strengthening Management of Human Capital: Legislation 
intended to improve management of the Federal workforce (S. 
2651) was introduced by Senator Voinovich and referred to the 
International Security, Proliferation and Federal Services 
Subcommittee, which held 2 days of hearings. After Senators 
Voinovich and Akaka negotiated an agreed-upon text, several of 
the provisions were then endorsed by the Committee for 
incorporation into the Homeland Security Act of 2002, which 
Congress enacted (Public Law 107-296; Sec. Sec. 1301-1332). 
These measures include a requirement that each agency have a 
Chief Human Capital Officer, a loosening of strictures on the 
hiring of employees, enhanced authority to grant early 
retirement or retirement incentive pay, the inclusion of human 
capital strategic planning in agencies' performance plans, and 
reforms relating to the Senior Executive Service.
    Securing Merit System Principles: The Committee reported 
out a bill to reauthorize the Merit Systems Protection Board 
(MSPB) and the Office of Special Counsel (OSC) (S. 3070). The 
bill, which was introduced by Senator Akaka, was subsequently 
incorporated into other legislation and enacted into law 
(enacted as H.R. 3340; Public Law 107-304). The MSPB and OSC 
administer programs and procedures to safeguard the Federal 
Government's merit-based system of employment, and to protect 
Federal employees against improper personnel practices, 
particularly regarding employees who step forward to disclose 
government waste, fraud and abuse.
    Maintaining High Ethical Standards: The Committee reported 
out, and Congress enacted, a bill reauthorizing the Office of 
Government Ethics, an agency established by the Ethics in 
Government Act of 1978 to help foster high ethical standards 
for employees in the Executive Branch (introduced as S. 1202; 
Public Law 107-119). The bill was introduced by Chairman 
Lieberman and cosponsored by Ranking Minority Member Thompson.
    Deferred Mandatory Retirement for Firefighters: The 
Committee reported out, and Congress enacted, a bill raising 
the mandatory separation age for Federal fire fighters from 55 
to 57, which is the age that now applies for Federal law 
enforcement officers. This measure will enable willing and able 
Federal fire fighters to continue to serve, and will remove the 
existing inequity that requires firefighters to retire younger 
than law enforcement officers (introduced in the Senate as S. 
271, enacted as H.R. 93; Public Law 107-27).
    Enhanced Benefits for Federal Government Workers: A number 
of bills reported by the Committee and ultimately enacted into 
law enhanced employment benefits available to Federal workers. 
These include legislation allowing military personnel and 
civilian employees to make use of promotional benefits, such as 
frequent flyer miles, that they receive as a result of official 
government travel (introduced as S. 1498, enacted as part of 
Public Law 107-107); authorizing Federal employees who 
participate in the Thrift Savings Plan and who are over 50 
years old to take advantage of ``catch-up'' contributions, thus 
allowing the Federal Government's tax-deferred plan to do what 
private sector plans may already choose to do (introduced as S. 
1822, enacted as part of H.R. 3340; Public Law 107-304); and 
enhancing the Federal Long-Term Care Insurance program to--(1) 
exempt premiums from State and local taxes, and (2) expand 
coverage to include retired Federal employees who are not yet 
receiving an annuity but are entitled to a deferred annuity 
(H.R. 2559; Public Law 107-104).
    Law Enforcement Powers for Inspector General Agents: The 
Committee reported out legislation, introduced by Ranking 
Minority Member Thompson and co-sponsored by Chairman 
Lieberman, to provide law enforcement powers to Inspector 
General Agents (S. 2530). The legislation was enacted as part 
of the Homeland Security Act of 2002 (Public Law 107-296; 
Sec. 812).
    Notification and Federal Employee Antidiscrimination and 
Retaliation Act: The Committee reported out legislation that 
holds Federal agencies accountable for violations of 
discrimination and whistleblower protection laws. The 
legislation, originally introduced in the House by 
Representative Sensenbrenner and in the Senate by Senator 
Warner, was enacted into law (H.R. 169; Public Law 107-174).

                          FINANCIAL MANAGEMENT

    The Committee passed important legislation strengthening 
and expanding financial management reforms for Federal 
agencies.
    Expanded Federal Financial Audits: The Committee reported 
out, and Congress enacted, legislation to expand the category 
of Federal agencies that are required to prepare audited 
financial statements each year. Prior to the introduction of 
this bill, only the 24 major departments and agencies were 
required by law to do so. In the years since the 1994 
Government Management Reform Act mandated the preparation of 
audited financial statements by the 24 agencies, the financial 
statements of the affected agencies have shown marked 
improvements. The legislation, introduced by Senator Fitzgerald 
as S. 2644 and passed as H.R. 4685, requires all Federal 
agencies to prepare annual financial statements, except that 
the OMB Director is authorized to exempt certain very small 
agencies (Public Law 107-289).
    Reducing Improper Payments: The Committee reported, and 
Congress enacted, legislation originating in the House of 
Representatives intended to reduce the billions of dollars in 
improper payments made by Federal agencies each year. The 
General Accounting Office (GAO) has reported that improper 
payments of between $19 billion and $20.7 billion were made in 
fiscal years 1999, 2000, and 2001. In October 2001, the GAO 
issued an Executive Guide prepared at Chairman Lieberman's 
request, that provided best practices recommendations for 
agencies to reduce improper payments. Building on these 
recommendations, H.R. 4878 requires Federal agencies to 
identify programs that are vulnerable to improper payments and 
to estimate annually the amount of underpayments and 
overpayments made by these programs. Agencies must also report 
on the steps they are taking to reduce improper payments for 
each program with estimated improper payments that exceed $10 
million (Public Law 107-300).

                    SMALL BUSINESS PAPERWORK RELIEF

    The Committee reported out legislation, introduced by 
Senator Voinovich, designed to aid small businesses in 
complying with Federal information collection requirements and 
to reduce the paperwork burdens on such companies (S. 1271). 
The legislation was enacted as H.R. 327 (Public Law 107-198).

                        PUBLIC HEALTH AND SAFETY

    The Committee held several hearings examining the Nation's 
public health and safety, particularly as it affects our youth. 
The hearings focused on the ill effects of drug and alcohol 
abuse among children and teens, and on child vaccine shortages.
    Ecstasy: The Law Enforcement Response: On July 30, 2001 the 
Committee held a hearing on the government's response to the 
ecstasy epidemic. The hearing examined how law enforcement at 
the local, State, and Federal levels was reacting to the rise 
in use of this club drug and whether the programs and 
initiatives designed to control the epidemic were having the 
desired effect.
    Binge Drinking on College Campuses: On May 15, 2002, a 
Committee hearing examined evidence of an epidemic of binge 
drinking on college campuses, including a comprehensive new 
study finding that the culture of drinking on college campuses 
is more damaging and deadly than previously recognized.
    Child Vaccine Shortages: On June 12, 2002, the Committee 
reviewed the shortages of childhood vaccines for significant 
diseases. Witnesses discussed the consequences of failing to 
address the problem, and potential solutions.

                            ELECTION REFORM

    In May 2001, the Committee held 2 days of hearings on 
Federal election practices. The hearings explored the flaws in 
the Nation's voting system, including those that marred the 
2000 elections, and examined possible solutions. Recent 
elections have demonstrated that States continue to have 
difficulties ensuring a fair and orderly election process for a 
variety of reasons; these included inaccurate voter 
registration rolls, faulty voting equipment, and poorly trained 
poll workers.

                          ENERGY DEREGULATION

    In June 2001, the Committee held a series of three hearings 
to examine the potential adverse consequences of energy 
deregulation, especially in the absence of adequate 
governmental oversight. The Committee began with an examination 
of California's troubled transition to a market-based utility 
system, and probed from an economic perspective the proper role 
of Federal regulators when the attempts to develop an open 
market fail. The Committee then focused more explicitly on the 
actions and inactions of FERC in responding to power outages 
and massive price increases experienced by California and other 
Western States. The final hearing examined the impact of 
deregulation of the electricity industry on the reliability of 
the electric grid.

             FINANCIAL DISCLOSURE FOR PRESIDENTIAL NOMINEES

    Presidential nominees frequently complain of the lengthy 
and unwieldy financial disclosure process they must undergo in 
order to accept Executive Branch appointments. Many see the 
problem as deterring qualified individuals from entering 
government. Following 2 days of hearings, Ranking Minority 
Member Thompson and Chairman Lieberman introduced legislation 
to streamline the financial disclosure process for nominees, 
while strengthening the public's right to know by making it 
easier to track waivers of conflicts of interest. The 
legislation, S. 1811, was reported out of Committee on May 16, 
2002. The Committee also produced a multi-volume compilation of 
past commission reports on the financial disclosure process.

                            D.C. LEGISLATION

    The Committee engaged in a number of oversight and 
legislative activities regarding the organization of the 
government of the District of Columbia, and the status and 
rights of its residents. Some of the key issues and legislation 
are described here.
    Voting Representation: In May 2002, the Committee held a 
hearing into whether citizens of Washington D.C. should be 
granted full voting representation in Congress. Proponents of 
voting rights testified that D.C. residents share the same 
burdens of citizenship as residents of other States, and are 
therefore entitled to the same voting representation. Chairman 
Lieberman subsequently introduced legislation to provide full 
voting representation in Congress to the residents of the 
District of Columbia. The bill, S. 3054, was reported out of 
Committee on October 9, 2002.
    D.C. College Access Improvement: The Committee considered 
and reported out House legislation to expand the District of 
Columbia Tuition Assistance Grant program. The legislation 
extended the educational grants to allow DC residents to attend 
Historically Black Colleges, and it widened the pool of 
residents eligible for the grants. The bill, H.R. 1499, was 
enacted on April 4, 2002 (Public Law 107-157).
    D.C. Family Court Reorganization: The Committee considered 
and reported out legislation to restructure the District of 
Columbia Family Court. The reorganization will promote the 
recruitment of experienced family law judges, extend their 
terms, and ensure consistency in the assignment of judges. The 
legislation was introduced in the House by Representative Tom 
DeLay (R-Tex.) (H.R. 2657) and in the Senate by Senator DeWine 
(S. 1382); both bills were reported out, with an amendment in 
the nature of a substitute, by the Committee, and the House 
bill was enacted on January 8, 2002 (Public Law 107-114).

                            EXPORT CONTROLS

    On March 15, 2001, the Committee held a hearing to examine 
changes in export control policy regarding high performance 
computers. The hearing, based on a report released by the GAO, 
focused on computers that could potentially be used for 
military purposes by countries responsible for proliferation of 
weapons of mass destruction.

 MONITORING, ACCOUNTABILITY AND COMPETITION IN THE FEDERAL AND SERVICE 
                           CONTRACT WORKFORCE

    On March 6, 2002, the Committee held a hearing to review 
the Administration's initiatives to increase the outsourcing of 
Federal services to the private sector, and how outsourcing 
affects the quality and cost of work performed for and by the 
Federal Government. The hearing focused on the Administration's 
efforts to impose numerical goals to increase competitions and 
conversions of Federal jobs, and on proposed legislation to 
allow Federal workers to compete more frequently for jobs being 
outsourced.

                         ENTERTAINMENT RATINGS

    On July 25, 2001, the Committee examined criticisms that 
the entertainment industry's systems for rating media products 
are not sufficiently reliable, visible, or understandable, and 
generally provide parents with insufficient information about 
content to allow them to make a knowledgeable choice for their 
children. The Committee considered the merits of switching to a 
uniform rating system, monitored by an independent oversight 
committee and grounded in research.

                       II. Committee Jurisdiction

    Rule XXV(1)(k) of the Standing Rules of the Senate requires 
reference to this Committee of all proposed legislation, and 
other matters, dealing with (1) archives of the United States; 
(2) budget and accounting measures, other than appropriations, 
except as provided in the Congressional Act of 1974; (3) census 
and collection of statistics, including social and economic 
statistics; (4) congressional organization, except for matters 
which amend the rules or orders of the Senate; (5) Federal 
civil service; (6) government information; (7) 
intergovernmental relations; (8) municipal affairs of the 
District of Columbia; (9) organization and management of the 
U.S. nuclear export policy; (10) organization and 
reorganization of the Executive Branch of the government; (11) 
Postal Service; and (12) status of officers and employees of 
the United States including their classification, compensation, 
and benefits.
    The Committee is further authorized and directed to (1) 
receive and examine reports of the Comptroller General of the 
United States and submit to the Senate such recommendations as 
the Committee deems advisable; (2) study the efficiency, 
economy, and effectiveness of all agencies and departments of 
the government; (3) evaluate the effects of laws enacted to 
reorganize the Legislative and Executive Branches of 
government; and (4) study the intergovernmental relations 
between the United States and international organizations of 
which the United States is a member.
    In addition, the Committee has primary oversight and 
legislative jurisdiction over the GAO, the Office of Personnel 
Management, and the General Service Administration, and 
processes all legislation relating to the disposal and the 
negotiated sales of Federal surplus property.
    With respect to investigations, the Committee is authorized 
to study or investigate: (1) the efficiency and economy of 
operations of all branches of the government; (2) the extent to 
which criminal or other improper practices or activities are, 
or have been, engaged in the field of labor-management 
relations; (3) organized criminal activity related to 
interstate or international commerce; (4) all other aspects of 
crime and lawlessness within the United States which have an 
impact upon or affect the national health, welfare, and safety; 
(5) the efficiency and economy of operations of all branches of 
the government with particular reference to certain national 
security concerns; (6) the efficiency, economy, and 
effectiveness of all agencies and departments involved in the 
control and management of energy shortages; (7) the efficiency 
and economy of all branches and functions of government with 
particular references to the operations and management of 
Federal regulatory policies and programs (S. Res. 54, 
Authorizing Expenditures by the Committees of the Senate for 
the Periods March 1, 2003, Through September 30, 2001, October 
1, 2001, Through September 30, 2002, and October 1, 2002, 
Through February 28, 2003 Sec. 11, 147 Cong. Rec. S 2089 (daily 
ed. Mar. 8, 2001)).

           III. Bills and Resolutions Referred and Considered

    During the 107th Congress, 140 Senate bills and 61 House 
bills were referred to the Committee for consideration. Also, 
10 Senate Resolutions, 8 Senate Concurrent Resolutions and 2 
House Concurrent Resolutions were referred to the Committee. Of 
the legislation received and considered, 87 bills and 
resolutions were reported and 80 were enacted into law. 
However, not all of the measures that became law did so in the 
form in which they were considered by the Committee--some were 
enacted as part of other bills, sometimes in revised form. 
Moreover, not all of the 80 measures that were enacted were 
actually reported by the Committee.

                              IV. Hearings

    During the 107th Congress, the Committee and its three 
Subcommittees held a total of 114 hearings on legislation, a 
wide variety of oversight issues, and nominations. The 
Committee also held 13 business meetings. At the full Committee 
level, a number of important topics were examined, including:

                           HOMELAND SECURITY

    In the wake of the September 11, 2001 terrorist attacks, 
the Committee held 19 hearings on homeland security, in 
addition to hearings held by Subcommittees. Four of these 
hearings, held on September 21, 2001, October 12, 2001, April 
11, 2002, and June 20, 2002, focused specifically on how 
government can best be organized to meet the threat of 
terrorism to our homeland. The other fifteen hearings addressed 
particular homeland security concerns, and also included 
consideration of organizational issues as they related to those 
topics. The areas covered by those hearings were: Critical 
infrastructure protection (September 12, 2001, October 4, 2001, 
and May 8, 2002), aviation safety (September 25, 2001 and 
November 14, 2001), bioterrorism (October 17, 2001), mail 
safety (October 30 and 31, 2001), port security (December 6, 
2001), the role of State and local government in homeland 
security (December 11, 2001), rail safety (December 13, 2001), 
public health preparedness (April 18, 2002), the role of the 
intelligence community in homeland security (June 26 and 27, 
2002), and protecting against weapons of mass destruction (June 
28, 2002).

    Hearings on Reorganizing the Government's Response to Terrorism

    Prior to the September 11 attacks, two reports were issued 
that advocated the need for more coordination in the Federal 
Government on preparedness and response to terrorism. The 
findings and recommendations of these reports were examined in 
the Committee's September 21, 2001 hearing, entitled 
``Responding to Homeland Threats: Is Our Government Organized 
for the Challenge?'' Witnesses included former Senators Gary 
Hart and Warren B. Rudman, co-chairs of the U.S. Commission on 
National Security/21st Century (commonly referred to as the 
Hart-Rudman Commission); then-Governor James S. Gilmore, III, 
of Virginia, chairman of the Advisory Panel to Assess the 
Capabilities for Domestic Response to Terrorism Involving 
Weapons of Mass Destruction (commonly referred to as the 
Gilmore Commission); L. Paul Bremer, III, former Ambassador-at-
Large for Counter-Terrorism, U.S. Department of State, and a 
member of the Gilmore Commission; and David M. Walker, 
Comptroller General, U.S. General Accounting Office. Although 
these witnesses had differing views on whether a new Department 
or a White House Office was the better course for addressing 
the country's homeland security needs, they agreed that better 
coordination of existing agencies and authorities was 
necessary.
    On October 12, 2001, the Committee held a second hearing on 
``Legislative Options to Strengthen Homeland Defense.'' This 
hearing focused on two bills: The Lieberman-Specter S. 1534, 
which was introduced to create a Department of National 
Homeland Security, and Senator Graham's S. 1449, which sought 
to establish a National Office for Combating Terrorism in the 
White House. Witnesses included a bipartisan group of Members 
who were major sponsors of these and other bills to improve the 
way government is organized for homeland defense: Senator Bob 
Graham (D-FL), Senator Bob Smith (R-NH), Senator Arlen Specter 
(R-PA), Representative Wayne T. Gilchrest (R-MD), 
Representative Jane Harman (D-CA), and Representative William 
``Mac'' Thornberry (R-TX). These witnesses all agreed that 
significant change was necessary to overcome existing turf 
battles between agencies and to improve cooperation and 
coordination across government in the fight against terrorism. 
They also generally agreed that Tom Ridge, the newly appointed 
director of the Office of Homeland Security, did not have 
sufficient authority to get this job done.
    The non-member witnesses at the October 12, 2001 hearing 
were: Former U.S. Representative Lee H. Hamilton, who was a 
member of the Hart-Rudman Commission; General (Ret.) Barry R. 
McCaffrey, formerly the head of the Office of National Drug 
Control Policy; General Charles G. Boyd, Director of the 
Washington Office of the Council on Foreign Relations, who was 
the Executive Director of the Hart-Rudman Commission; Stephen 
E. Flynn, Senior Fellow with the Council on Foreign Relations; 
and Thomas H. Stanton of the National Academy of Public 
Administration. These witnesses noted some of the shortcomings 
in Governor Ridge's appointment as head of the Office of 
Homeland Security, and highlighted the country's problems in 
managing its borders as an example of the hurdles the country 
must overcome to more effectively guard against future attacks.
    On April 11, 2002 the Committee held a hearing on draft 
legislation to create a National Department of Homeland 
Security and a White House Office on Combating Terrorism. The 
hearing focused on the need to provide new leadership on a 
range of homeland threats, including terrorism, by 
consolidating into a single Department the key Federal agencies 
and programs responsible for border security, critical 
infrastructure protection and emergency response, as well as on 
the need for a White House office to play a government-wide 
coordinating role on terrorism, focusing in particular on 
matters outside the purview of the new Homeland Security 
Secretary such as military and intelligence policy. The 
legislation, which was later introduced by Chairman Lieberman 
with some modifications as S. 2452, also called for a 
comprehensive national strategy to combat terrorism, to be 
developed collaboratively by the new Secretary of Homeland 
Security and the Director of the White House Office for 
Combating Terrorism.
    At the April 11, 2002, hearing the Committee heard from 
Representative Ellen Tauscher (D-CA); Senator Bob Graham (D-
FL); Senator Arlen Specter (R-PA); Senator Judd Gregg (R-NH); 
Representative William ``Mac'' Thornberry (R-TX); and 
Representative Jane Harman (D-CA). Other witnesses included 
former Senator Warren B. Rudman; David M. Walker, the 
Comptroller General of the U.S. General Accounting Office; 
Mitchell E. Daniels, Jr., the Director of the Office of 
Management and Budget; Phil Anderson, Senior Fellow and 
Director, Homeland Security Initiative at the Center for 
Strategic and International Studies (CSIS); I.M. ``Mac'' 
Destler, Professor at the School of Public Affairs, University 
of Maryland; Stephen M. Gross, Chairman of the Border Trade 
Alliance; Elaine Kamarck, Lecturer in Public Policy at 
Harvard's Kennedy School of Government; and Paul C. Light, Vice 
President and Director of Governmental Studies Program at The 
Brookings Institute.
    In June 2002, the President dropped his opposition to 
creating a new Department and released his own proposal to 
create a Department of Homeland Security. On June 20, 2002, the 
Committee held a hearing to examine differences between the 
President's proposal and S. 2452 as reported out by the 
Committee in May, 2002. Witnesses included Tom Ridge, Assistant 
to the President for Homeland Security, and former Senators 
Gary Hart and Warren B. Rudman. The key issues considered 
included: Information sharing and intelligence analysis; 
specific agencies included in or left out of the President's 
proposal; the impact of a new Department on agency non-homeland 
security functions; the impact on employees moved to the new 
Department; and the transition and cost of a new Department. 
Three subsequent hearings also considered the President's plan, 
in the context of specific issues: Two hearings, on June 26 and 
27, 2002, examined the impact on the intelligence community, 
and a hearing on June 28, 2002 focused on protecting against 
weapons of mass destruction.

             Hearings on Homeland Security Vulnerabilities


                        CRITICAL INFRASTRUCTURE

    The Committee held three hearings on critical 
infrastructure issues. The first, on September 12, 2001, had 
been scheduled before the terrorist attacks and focused on 
cyber-security. Joel C. Willemssen, Managing Director, 
Information Technology Issues, GAO, testified that Federal 
computer systems are plagued with weaknesses that continue to 
put critical operations and assets at risk. Willemssen 
recommended that the Administration take greater steps to 
develop the strong analytical and information-sharing 
capabilities required by President Clinton's Presidential 
Decision Directive (PDD) 63, to protect the Nation's critical 
infrastructures. Roberta L. Gross, Inspector General for NASA, 
described the collective findings of 21 departmental and agency 
Inspectors General, which discovered a number of problems in 
agencies' implementation of PDD 63.
    On October 4, 2001, the Committee received testimony 
regarding the government's implementation of PDD 63, which 
established the country's framework for protecting its critical 
infrastructure. The hearing, entitled ``Critical 
Infrastructure: Who's in Charge?'' examined the various 
government offices established to oversee and coordinate 
critical infrastructure protection with the private sector, and 
the government's efforts to protect its own critical 
infrastructure. While initiatives had been underway before 
September 11, 2001, to shore up infrastructure protections, 
testimony revealed that progress had been limited, partly 
because the responsible offices lacked budget authority and had 
difficulty assuring accountability.
    Witnesses included: Ronald L. Dick, Director of the FBI's 
National Infrastructure Protection Center (NIPC); Sallie 
McDonald, Director of the Federal Computer Incident Response 
Center, General Services Administration; John S. Tritak, 
Director of the Critical Infrastructure Assurance Office 
(CIAO), Bureau of Export Administration, Department of 
Commerce; Frank J. Cilluffo, Deputy Director of the Global 
Organized Crime Project, Center for Strategic and International 
Studies; Jamie S. Gorelick, Vice Chair, Fannie Mae; Joseph P. 
Nacchio, Chairman and CEO, Qwest Communications International, 
Inc.; and Kenneth C. Watson, President, Partnership for 
Critical Infrastructure Protection Security.
    In a May 8, 2002 hearing, entitled ``Securing our 
Infrastructure: Private/Public Information Sharing,'' the 
Committee returned to the issue of critical infrastructure 
protection. An important part of our national strategy to 
protect critical infrastructure has been to foster the sharing 
of relevant information between the private sector and the 
Federal Government and among entities in the private sector. 
Yet some in the private sector reported they were reluctant to 
share the necessary information because they fear adverse 
consequences to themselves, such as the release of sensitive 
information under the Freedom of Information Act (FOIA). On the 
other hand, representatives of environmental and open-
government groups stressed the importance of maintaining 
appropriate public access to information submitted to the 
government, arguing that excessive secrecy actually removes 
powerful incentives for remedying health, safety, and security 
risks. This hearing examined whether information about critical 
infrastructure was being effectively shared and used, and 
whether a FOIA exemption or other legislation intended to 
foster such sharing and use would be necessary, effective and 
appropriate. The hearing also examined S. 1456, the Critical 
Infrastructure Information Security Act of 2001, which had been 
introduced by Senators Bennett and Kyl on September 24, 2001.
    The witnesses were: Ronald L. Dick, Director of NIPC; John 
G. Malcolm, Deputy Assistant Attorney General, Criminal 
Division, U.S. Department of Justice; John S. Tritak, Director 
of CIAO; Michehl R. Gent, CEO, North American Electric 
Reliability Council; Harris N. Miller, President, Information 
Technology Association of America; Alan Paller, Director of 
Research, The SANS Institute; Ty R. Sagalow, Board Member, 
Financial Services ISAC and Executive Vice President, eBusiness 
Risk Solutions, American International Group; David L. Sobel, 
General Counsel, Electronic Privacy Information Center; and 
Rena I. Steinzor, Academic Fellow, Natural Resources Defense 
Council.

                           AVIATION SECURITY

    On September 25, 2001, at a hearing entitled ``Weak Links: 
How Should the Federal Government Manage Airline Passenger and 
Baggage Screening?'' witnesses testified to the massive 
turnover rates and poor performance among airport screeners due 
to inadequate training, low wages and lack of benefits. The 
hearing revealed significant weaknesses in screening checked 
bags for explosives, restricting access to sensitive areas of 
the airport, and in screening passengers and their carry-on 
items for possible threats. Those testifying included Monte R. 
Belger, Acting Deputy Administrator, Federal Aviation 
Administration, U.S. Department of Transportation; Dr. Gerald 
L. Dillingham, Associate Director for Transportation Issues, 
GAO; Kenneth M. Mead, Inspector General, U.S. Department of 
Transportation; Robert W. Baker, Vice Chairman, American 
Airlines; Rear Admiral Paul E. Busick, USCG Ret., President and 
Executive Director, North Carolina Global TransPark Authority; 
Leonard L. Griggs, Jr., Airport Director, Lambert-St. Louis 
International Airport; Aubrey ``Bill'' Harvey, Jr., Trainer of 
Screeners, Chicago O'Hare International Airport; and Michael B. 
LaPier, Executive Director, Central Illinois Regional Airport.
    The Committee held a second hearing on aviation safety on 
November 14, 2001, to determine what, if any, improvements had 
been made to make air travel safer after the September 11 
terrorist attacks. Although witnesses described some 
improvements, they also noted persistent problems. For example, 
the Department of Transportation Inspector General testified 
that only 10 percent of checked baggage was being scanned for 
explosives, and explosives detection machines were being 
underutilized. Witnesses at this hearing included Jane F. 
Garvey, Administrator, Federal Aviation Administration; Kenneth 
M. Mead, Inspector General, Department of Transportation; Bruce 
E. Carter, Director of Aviation, Quad City International 
Airport; Jacqueline Mathes, Flight Attendant, Association of 
Flight Attendants, AFL-CIO; Marianne McInerney, Executive 
Director, National Business Travel Association (NBTA); and 
Captain Duane E. Woerth, President, Air Line Pilots 
Association, International.

                              BIOTERRORISM

    At a hearing on October 17, 2001, the Committee examined 
the plans and current capabilities of Federal, State and local 
elements of the health system to respond to bioterrorist 
attacks and natural disease outbreaks. Held in the midst of the 
anthrax attacks on the Senate and elsewhere, the hearing 
disclosed that some efforts had been made in recent years to 
improve the capabilities of government and health care 
providers to respond to these events, such as developing a 
national stockpile of pharmaceutical supplies and improving 
Federal laboratory capability. However, the hearing also 
revealed that far more needed to be done throughout the public 
health system, especially to improve State and local public 
health laboratory and response capability, health surveillance 
programs, and training and preparedness of hospitals and 
primary care providers.
    Testimony was provided by Tommy G. Thompson, Secretary, 
U.S. Department of Health and Human Services; Michael D. Brown, 
then Acting Deputy Director, FEMA; Deborah J. Daniels, 
Assistant Attorney General, Office of Justice Programs, U.S. 
Department of Justice; Henry L. Hinton, Jr., Managing Director, 
Defense Capabilities and Management, GAO; Anna Johnson-Winegar, 
Deputy Assistant to the Secretary of Defense for Chemical and 
Biological Defense, U.S. Department of Defense; Maureen E. 
Dempsey, Director, Missouri Department of Health and Senior 
Services; Margaret A. Hamburg, Vice President for Biological 
Programs, Nuclear Threat Initiative; Gary W. McConnell, 
Director, Georgia Emergency Management Agency; and Amy E. 
Smithson, Director, Chemical and Biological Weapons Non-
Proliferation Project, The Henry L. Stimson Center.

                              MAIL SAFETY

    Following the anthrax attacks through the mail in October 
2001, the Committee held a 2-day hearing on ``Terrorism Through 
the Mail: Protecting Postal Workers and the Public.'' The first 
day, October 30, 2001, examined the adequacy of the steps the 
U.S. Postal Service took to protect the safety of its workers 
and the public and its plans to keep its workers and the mail 
safe in the future. Based on decades-old studies, public health 
professionals did not anticipate that postal employees would be 
at risk for inhalation anthrax from sealed envelopes, yet two 
postal workers died and others became ill. The witnesses at 
this hearing were: John E. Potter, Postmaster General/CEO, U.S. 
Postal Service, accompanied by Thomas Day, Vice President of 
Engineering, U.S. Postal Service; Patrick Donahoe, Chief 
Operating Officer and Executive Vice President, U.S. Postal 
Service; and Ken Weaver, Chief Postal Inspector, U.S. Postal 
Inspection Service; Gus Baffa, President, National Rural Letter 
Carriers Association (NRLCA); William Burrus, President-Elect, 
American Postal Workers Union AFL-CIO, accompanied by Denise 
Manley, Distribution Clerk, Government Mail Section, Brentwood 
Mail Processing Facility; William H. Quinn, National President, 
National Postal Mail Handlers Union; Vincent R. Sombrotto, 
President, National Association of Letter Carriers (NALC), 
accompanied by Tony DiStephano, Jr., President, NALC Branch 
380, Trenton, New Jersey.
    The next day, October 31, the Committee heard from public 
health officials and health experts regarding their 
understanding of anthrax and its potential effects, as well as 
what could be done better in a future situation. The hearing 
explored whether those who had specific information about the 
nature of the anthrax sent through the mail accurately 
communicated the level of risk presented so that crucial 
decisions could be made properly, such as whether to close 
postal facilities and how to respond to individuals who might 
be infected. Those testifying included Senator Hillary Rodham 
Clinton (D-NY); Senator Paul D. Wellstone (D-MN); Mitchell L. 
Cohen, Director, Division of Bacterial and Mycotic Diseases, 
National Center for Infectious Diseases, Centers for Disease 
Control and Prevention (CDC), Department of Health and Human 
Services; Raymond J. Decker, Director, Defense Capabilities and 
Management Team, U.S. General Accounting Office; Major General 
John S. Parker, Commanding General, U.S. Army Medical Research 
and Materiel Command and Fort Detrick; Ivan C.A. Walks, Chief 
Health Officer of the District of Columbia, and Director, 
District of Columbia Department of Health (DOH), accompanied by 
Larry Siegel and Ted Gordon, Senior Deputies, District of 
Columbia Department of Health (DOH); Dan Hanfling, Chairman, 
Disaster Preparedness Committee, Inova Fairfax Hospital; and 
Tara O'Toole, Director, Center for Civilian Biodefense Studies, 
Johns Hopkins University.

                             PORT SECURITY

    On December 6, 2001, the Committee held a hearing, entitled 
``Weak Links: Assessing the Vulnerability of U.S. Ports and 
Whether the Government is Adequately Structured to Safeguard 
Them.'' The hearing focused on the vulnerabilities at U.S. 
ports, which are the country's key transportation link for 
global trade; yet, as the testimony revealed, security at these 
ports had been sacrificed for efficiency. Several witnesses--
current or former front-line officials with experience in 
maintaining port security--proposed solutions to remedy these 
vulnerabilities, such as increasing information-sharing among 
Federal agencies, as well as among Federal, State and local 
agencies and the port operators; ``pushing the borders back'' 
to inspect goods at points of origin; using technology 
effectively to provide in-transit visibility and accountability 
for goods; and enlisting private sector cooperation in 
heightening security at ports.
    The witnesses at the hearing were: Senator Ernest F. 
Hollings (D-SC); F. Amanda DeBusk, Miller and Chevalier, former 
Assistant Secretary of Commerce and former Commissioner, 
Interagency Commission on Crime and Security in U.S. Seaports; 
Stephen E. Flynn, Senior Fellow, Council on Foreign Relations 
and Commander, U.S. Coast Guard; Rear Admiral Richard M. 
Larrabee, Ret., Director, Port Commerce Department, the Port 
Authority of New York and New Jersey; Rob Quartel, Chairman and 
Chief Executive Officer, FreightDesk Technologies and former 
Member, U.S. Federal Maritime Commission; Argent Acosta, Senior 
Customs Inspector, Port of New Orleans, and President, National 
Treasury Employees Union (NTEU) Chapter 168; Deputy Chief 
Charles C. Cook, Memphis Police Department; W. Gordon Fink, 
President, Emerging Technology Markets; and Michael D. Laden, 
President, Target Customs Brokers, Inc.

        ROLE OF STATE AND LOCAL GOVERNMENT IN HOMELAND SECURITY

    On December 11, 2001, the Committee held a hearing designed 
to review the issues faced by State and local officials, who 
are often on the front lines in our Nation's fight against 
terrorism. Witnesses stressed that responsibility for homeland 
security is shared by the Federal, State, and local 
governments. They testified regarding a variety of needs, 
including: Increased Federal financial assistance to local 
jurisdictions; pre-planning and practice exercises to insure 
effective cooperation among first responders; improving 
cooperation and communication among governments, and especially 
among law enforcement officials; rebuilding of the public 
health infrastructure to insure its ability to respond to bio-
terrorism events; and the need for a national strategy for 
responding to terrorist attacks.
    Witnesses were: New Orleans Mayor Marc H. Morial, Chair of 
the National Conference of Mayors; Jay Fisette, Chairman, 
Arlington County Board, Virginia; Javier Gonzales, President, 
National Association of Counties; Richard J. Sheirer, Director, 
Office of Emergency Management, City of New York, New York; 
John D. White Jr., Director, Tennessee Emergency Management 
Agency; Chief William B. Berger, President, International 
Association of Chiefs of Police; Dr. Michael C. Caldwell, on 
behalf of the National Association of City and County Health 
Officials; Michael J. Crouse, Chief of Staff for the General 
President of the International Association of Fire Fighters; 
and Major General Joseph E. Tinkham, II, Adjutant General of 
Maine and Commissioner, Maine Department of Defense, Veterans 
and Emergency Management.

                              RAIL SAFETY

    A December 13, 2001 hearing, entitled ``Riding the Rails: 
How Secure is our Passenger and Transit Infrastructure?'' 
examined the Federal Government's role in helping to protect 
the passenger and transit infrastructure. Testimony revealed 
that passenger transit systems are difficult to secure and 
present attractive targets to terrorists. The fact that the 
Nation's public transit systems are diverse and widely 
dispersed among communities pose unique security challenges, 
which in turn require greater cooperation between Federal, 
State and local governments and regional transit authorities. 
The Committee heard from Jennifer L. Dorn, Administrator, 
Federal Transit Administration, U.S. Department of 
Transportation; Dorothy W. Dugger, Deputy General Manager, San 
Francisco Bay Area Rapid Transit District (BART); Ernest R. 
Frazier, Sr., Chief of Police and Senior Vice President of 
System Security and Safety, Amtrak; Trixie Johnson, Research 
Director, Mineta Transportation Institute; Jeffrey A. Warsh, 
Executive Director, New Jersey Transit Corporation; and Richard 
A. White, General Manager, Washington Metropolitan Area Transit 
Authority.

                       PUBLIC HEALTH PREPAREDNESS

    On April 18, 2002, the Committee held a hearing on ``The 
State of Public Health Preparedness for Terrorism Involving 
Weapons of Mass Destruction: A Six-Month Report Card.'' The 
hearing was a follow-up to a hearing held by the Committee on 
October 17, 2001. That October hearing highlighted a dangerous 
lack of preparedness of the Nation to cope with a terrorist 
attack utilizing biological, chemical, or radiological agents. 
The April 18th hearing focused on: (1) coordination and 
communication between public health agencies and law 
enforcement in the event of a terrorist attack with public 
health implications; (2) the proposed consolidation of public 
relations functions within HHS; and (3) budgetary requirements 
for HHS to fully implement its counter-terrorism efforts. The 
witnesses included HHS Secretary Tommy G. Thompson, who updated 
the Committee on the progress the Department had made in terms 
of public health preparedness for terrorism involving chemical, 
biological, and radiological attacks; Margaret A. Hamburg of 
the Nuclear Threat Initiative; Thomas V. Inglesby of the Johns 
Hopkins Center for Civilian Biodefense Strategies; and Thomas 
L. Milne of the National Association of County and City Health 
Officials.

        ROLE OF THE INTELLIGENCE COMMUNITY IN HOMELAND SECURITY

    On June 26 and 27, 2002, the Committee held hearings that 
focused on the relationship between the proposed Department of 
Homeland Security and the intelligence community. These 
hearings addressed the absence of a single location in the 
government where all available intelligence is brought together 
to be analyzed. The testimony focused on whether a Department 
of Homeland Security requires an all-source intelligence 
analysis capability in order to effectively achieve its mission 
of preventing, deterring, and protecting against terrorist 
attacks; the appropriate role for the Department's intelligence 
function when the Nation's intelligence collection priorities 
are determined; the extent to which the Department would 
already be a significant collector of intelligence-related 
information, through agencies such as the Customs Service and 
the Coast Guard; and the Department's need for access to 
information collected by intelligence, law enforcement, and 
other agencies.
    Witnesses included Senator Bob Graham (D-FL), and Senator 
Richard Shelby (R-AL), the Chairman and Ranking Member of the 
Senate Select Committee on Intelligence; CIA Director George J. 
Tenet; FBI Director Robert S. Mueller, III; William H. Webster, 
former CIA Director; Lt. Gen. Patrick M. Hughes, former 
Director of the Defense Intelligence Agency; Jeffrey H. Smith, 
former General Counsel of the Central Intelligence Agency; Lt. 
Gen. William E. Odom, former Director of the National Security 
Agency; Chief William B. Berger, President of the International 
Association of Chiefs of Police; and Ashton B. Carter, former 
Assistant Secretary of Defense for International Security 
Policy.

             PROTECTING AGAINST WEAPONS OF MASS DESTRUCTION

    On June 28, 2002, the Committee held a hearing, ``Preparing 
for Reality: Protecting Against Weapons of Mass Destruction,'' 
which explored how a Department of Homeland Security should be 
organized to counter the threat posed by weapons of mass 
destruction, and also addressed relevant science and 
technology, research and development, and public health issues. 
Witnesses who testified included: Lewis M. Branscomb, Professor 
Emeritus, Public Policy and Corporate Management, John F. 
Kennedy School of Government, Harvard University; Margaret A. 
Hamburg, M.D., Vice President of Biological Programs, Nuclear 
Threat Initiative; J. Leighton Reed, M.D., General Partner, 
Alloy Ventures; Janet Heinrich, Director, Health Care--Public 
Health Issues, GAO; and William J. Madia, Director, Oak Ridge 
National Laboratory, Executive Vice President, Battelle 
Memorial Institute.

                                 ENRON

    As part of its investigation into the demise of Enron, the 
full Committee held a series of five hearings looking into 
various aspects of the company's collapse. These hearings took 
place on January 24, 2002, February 5, 2002, February 27, 2002, 
March 20, 2002 and November 12, 2002.
    The first of the Committee's hearings on Enron, ``The Fall 
of Enron: How Could It Have Happened?'' was held on January 24, 
2002. The hearing sought to gain an overview of some of the 
most prominent issues arising out of Enron's collapse, 
including problems in oversight of the securities markets, 
derivatives markets, employee retirement plans, and the energy 
markets. Former Securities and Exchange Commission Chairman 
Arthur Levitt, Jr., testified about the ``culture of 
gamesmanship'' on Wall Street--among the corporate executives, 
boards of directors, public accountants, and stock analysts--
that created an atmosphere in which large-scale financial 
deception was possible. Former SEC Chief Accountant Lynn E. 
Turner testified about flawed and ambiguous financial reporting 
rules that Enron used in order to cover its fraud. University 
of San Diego Law Professor Frank Partnoy talked about the 
unregulated $100 trillion derivatives market, and how Enron 
could have taken advantage of this lack of oversight to engage 
in false profit-making transactions. Yale Law School Professor 
John H. Langbein, addressing the considerable losses suffered 
by Enron employees in their retirement accounts, testified that 
many 401(k) plans are underdiversified, leaving many employees 
of other corporations exposed to the same fate as the Enron 
workers. Bruce B. Henning, Director of Regulatory and Market 
Analysis at Energy and Environmental Analysis, Inc., testified 
about the impact of Enron's collapse on the energy markets.
    On February 5, 2002, the Committee held a hearing, 
``Retirement Insecurity: 401(k) Crisis at Enron,'' that 
examined the enormous losses suffered by the Enron employees in 
their 401(k) accounts, which contained high concentrations of 
Enron stock (as of December 31, 2000, when Enron stock was at a 
high, roughly two-thirds of the $2.1 billion in assets held by 
the 401(k) plan was in company stock). The Committee also 
examined the circumstances surrounding Enron's ``lock-down'' of 
the plan during a time when the company stock price was 
dropping, preventing employees from selling the stock and 
avoiding some of the losses they experienced.
    There were three panels of witnesses. The first panel 
included Deborah G. Perrotta, an Enron employee who had lost 
her job and most of the value in her 401(k), and William D. 
Miller, Jr., Business Manager and Financial Secretary, of the 
International Brotherhood of Electrical Workers, Local 125, at 
Portland General Electric, an Enron subsidiary. The second 
panel included Executive Vice President for Human Resources 
Cindy Olson, who had overseen the lock-out and was a member of 
the committee overseeing the 401(k) plan; Mikie Rath, Benefits 
Manager at Enron; Joseph P. Szathmary of Northern Trust 
Retirement Consulting, the company that had been the 
recordkeeper for Enron's 401(k) plan; and Catheryn Graham of 
Hewitt Associates, the company to which the recordkeeping 
responsibilities had been transferred, a transfer that resulted 
in the temporary ``lock-down'' of the plan. Finally, the 
Committee heard testimony from a third panel about the problems 
associated with the way 401(k) plans are overseen and managed 
and about related policy issues and recommendation; the third 
panel consisted of Karen W. Ferguson, Director of the Pension 
Rights Center; James A. Klein, President of the American 
Benefits Council; Erik D. Olsen, a member of the Board of 
Directors of AARP; Stephen M. Saxon of the Society of 
Professional Administrators and Recordkeepers; and Susan J. 
Stabile, Professor at St. John's University School of Law.
    On February 27, 2002, the Committee held a hearing, ``The 
Watchdogs Didn't Bark: Enron and the Wall Street Analysts,'' to 
examine why 11 of 16 stock analysts from major firms covering 
Enron failed to detect the problems at Enron and continued to 
recommend that investors buy the stock until just before the 
company declared bankruptcy. The Committee heard from four 
analysts from major Wall Street firms--Raymond C. Niles of 
Citigroup Salomon Smith Barney, Anatol Feygin of J.P. Morgan 
Securities, Inc., Curt N. Launer of Credit Suisse First Boston, 
and Richard Gross of Lehman Brothers, Inc.--who defended their 
assessments of Enron, as well as from independent analyst 
Howard M. Schilit, who testified that there were numerous red 
flags in Enron's public filings that should have led the Wall 
Street analysts to question their conclusions. In addition, 
Robert R. Glauber, Chairman and CEO of National Association of 
Securities Dealers, Thomas A. Bowman, President and CEO of 
Association for Investment Management and Research, Charles L. 
Hill, Thomson Financial/First Call Director of Research, and 
Frank Torres, Legislative Counsel of Consumers Union, testified 
about the conflicts of interest that can put pressure on 
analysts working for Wall Street firms to offer overly positive 
stock recommendations in order to establish or maintain 
lucrative investment banking client relationships, and about 
policy proposals to address these conflicts. Information and 
recommendations coming out of this hearing were incorporated 
into the Committee staff report on Financial Oversight of 
Enron: The SEC and Private Sector Watchdogs (S. Prt. 107-75, 
Oct. 7, 2002).
    On March 20, 2002, the Committee held a hearing, ``Rating 
the Raters: Enron and the Credit Rating Agencies,'' about the 
role of the credit rating agencies in Enron's collapse. The 
three major credit rating agencies enjoy a special status 
because of their greater access to corporate information than 
most other market participants, the considerable value placed 
on an investment grade rating, and a special SEC designation. 
Each of the agencies, however, maintained an investment grade 
credit rating on Enron until just 4 days before the company's 
bankruptcy. At the hearing, analysts responsible for evaluating 
Enron at each of the three major credit rating agencies--Ronald 
M. Barone, Managing Director at Standard & Poor's, John C. 
Diaz, Managing Director of Moody's Investors Service, Ralph G. 
Pellecchia, Senior Director of the Global Power Group at Fitch 
Ratings--testified about why they had failed to find or take 
into account problems at Enron in their assessments until very 
late. The Committee also heard from a panel that addressed 
whether additional oversight and/or regulation of ratings 
agencies would be desirable. This panel included SEC 
Commissioner Isaac C. Hunt, Jr.; Glenn L. Reynolds, CEO of 
CreditSights, Inc., an independent credit analysis firm; 
Cornell Law School Professor Jonathan R. Macey; and Steven L. 
Schwarcz, Professor of Law at Duke University School of Law. As 
with the hearing on the Wall Street analysts, information and 
recommendations coming out of the credit raters' hearing were 
incorporated into the Committee staff report on Financial 
Oversight of Enron: The SEC and Private Sector Watchdogs (S. 
Prt. 107-75, Oct. 7, 2002).
    On November 12, 2002, the Committee held a hearing, 
``Asleep at the Switch: FERC's Oversight of Enron 
Corporation,'' on the role of FERC in overseeing Enron. David 
M. Berick, professional staff member for the Committee, 
testified about the findings arising from the Majority 
Committee staff's investigation. In particular, Mr. Berick 
testified that there were four areas where FERC utterly failed 
to conduct effective oversight of Enron: Its inaction in the 
face of Enron's use of apparently sham sales to maintain 
favorable regulatory status for some of the company's wind 
farms; its inquiry into Enron's electronic trading system, 
Enron Online; its lack of oversight into questionable 
transactions between Enron and its regulated affiliates; and 
its slow response to abusive trading practices allegedly 
engaged in by Enron traders during the power crisis in the 
California and Western energy markets in 2000-2001. The 
Committee then heard from each of the four individuals who were 
FERC commissioners at the time: Patrick H. Wood, III 
(Chairman), Linda K. Breathitt, Nora M. Brownell, and William 
L. Massey. Among other things, Chairman Wood discussed new 
measures undertaken by FERC that he believed would address the 
issues raised by the Committee's investigation, including the 
establishment of a new Office of Market Monitoring and 
Investigations. The hearing's final panel, comprised of Paul L. 
Joskow, Director of the Center for Energy and Environmental 
Policy Research at the Massachusetts Institute of Technology, 
and Frank A. Wolak, Professor of Economics at Stanford 
University, provided their perspective on FERC's performance 
and the outlook for FERC going forward.
    In connection with this hearing, Chairman Lieberman 
released a staff memorandum setting out Majority staff's 
findings in more detail, and Ranking Minority Member Thompson 
released a staff memorandum setting forth Minority views on 
these matters. These memoranda were included in the appendix to 
the printed hearing record (S. Hrg. 107-854).

                    OVERSIGHT OF ENERGY DEREGULATION

    The Committee held a series of three hearings to examine 
the impacts of deregulation of U.S. electricity and natural gas 
markets, in general, and the markets in California and the 
West, in particular. These hearings were held on June 13, 2001, 
June 20, 2001, and June 28, 2001.
    The first hearing, on June 13, 2001, focused primarily on 
the impacts of California's failed transition to a market-based 
utility system and highlighted both the economic costs and the 
need for aggressive regulatory oversight and intervention by 
Federal energy regulators when these ``open'' markets are being 
developed, fail, or are being abused. The Committee heard 
testimony from a panel of experts in the economics of the 
deregulation of markets concerning whether additional 
intervention in the California market was necessary or 
appropriate.
    Following testimony by Senator Dianne Feinstein (D-CA), 
Senator Barbara Boxer (D-CA), and Senator Larry E. Craig (R-
ID), the Committee heard testimony from the following 
witnesses: Paul L. Joskow, a professor and researcher at the 
Massachusetts Institute of Technology in the areas of 
industrial organization, energy and environmental economics, 
and government regulation of industry; Alfred E. Kahn, 
professor emeritus of Political Economy at Cornell University, 
and former Chairman of the Civil Aeronautics Board under 
President Carter where he led the Nation's drive to deregulate 
the airline industry; Severin Borenstein, professor in Public 
Policy and Business Administration at the University of 
California's Haas School of Business, Director of the 
University of California Energy Institute, and former member of 
the Governing Board of the California Power Exchange 
Corporation; Frank A. Wolak, specialist in Industrial 
Organization and Econometric Theory at Stanford University, 
where he is a Professor in the Economics Department and is also 
the Chairman of the Market Surveillance Committee of the 
California Independent System Operator; Lawrence J. Makovich 
who is a Senior Director of Cambridge Energy Research 
Associates; and William W. Hogan of the John F. Kennedy School 
of Government at Harvard University.
    The second hearing was held on June 20, 2001 on the role of 
FERC in the California energy crisis and the implications of 
the crisis for deregulation of energy markets nationwide. The 
hearing focused primarily on FERC's actions, and inactions, in 
responding to power outages and massive price increases 
experienced in California and in adjacent States. Whereas the 
hearing on June 13 addressed the economic impacts of 
deregulation and economic justification for rate relief for 
California and the West, the hearing on June 20 examined the 
legal and regulatory underpinnings for the failure of the 
California and Western markets and possible solutions. 
Following testimony by several members of the Senate--Senator 
Maria Cantwell (D-WA), Senator Frank H. Murkowski (R-AK), and 
Senator Patty Murray (D-WA)--the Committee took testimony from 
four panels composed of the following witnesses: Governor Gray 
Davis, State of California; Governor John Hoeven, State of 
North Dakota; Governor Judy Martz, State of Montana; Christine 
O. Gregoire, Attorney General for the State of Washington; Roy 
Hemmingway, Chairman of the Oregon Public Utilities Commission; 
Curt L. Hebert, Jr., Chairman, FERC; Linda K. Breathitt, 
Commissioner, FERC, Nora M. Brownell, Commissioner, FERC, 
William L. Massey, Commissioner, FERC, and Patrick H. Wood, 
III, Commissioner, FERC.
    The final hearing took place on June 28, 2001 and examined 
the impact of deregulation of the electricity industry on 
system reliability of the electric grid. The Committee heard 
from a panel of expert witnesses comprised of the following: 
David N. Cook, General Counsel, North American Electric 
Reliability Council; Phillip G. Harris, President and CEO, PJM 
Interconnection, LLC; Kevin A. Kelly, Director, Division of 
Policy Innovation and Communication, FERC; and Irvin A. 
``Sonny'' Popowsky, the Pennsylvania Consumer Advocate on 
behalf of the National Association of State Utility Consumer 
Advocates (NASUCA).

                       GOVERNMENT REORGANIZATION

    Climate Change Legislation: On July 18, 2001, the Committee 
held a hearing entitled ``S. 1008--The Climate Change Strategy 
and Technology Innovation Act of 2001.'' S. 1008 sought to 
create an Office on Climate Change within the White House, and 
require the office to prepare a detailed strategy to stabilize 
the concentration of greenhouse gasses in the atmosphere. The 
legislation also sought to create a new office within the 
Department of Energy, with new funding, to research and develop 
technologies to combat climate change. Eight witnesses 
appeared: The bill's chief sponsor, Senator Robert C. Byrd (D-
WV); two climate scientists, Thomas R. Karl, Director, National 
Climatic Data Center, NOAA, and James E. Hansen, head of NASA's 
Goddard Institute for Space Studies; Eileen Claussen, President 
of the Pew Center on Global Climate Change; James A. Edmonds, 
Senior Staff Scientist, Pacific Northwest National Laboratory, 
Battelle Memorial Institute; Dale E. Heydlauff, Senior Vice 
President-Environmental Affairs, American Electric Power 
Company; Jonathan Lash, President, World Resources Institute; 
and Margo Thorning, Senior Vice President and Chief Economist 
for the American Council for Capital Formation. In addition, 
the Committee received written testimony from Prof. John P. 
Holdren, Director of a program on Science, Technology and 
Public Policy at Harvard University's Kennedy School of 
Government, and David G. Hawkins, Director, NRDC Climate 
Center, Natural Resources Defense Counsel.
    EPA Cabinet Bill: On July 24, 2001, the Committee held a 
hearing on S. 159, a bill to elevate the Environmental 
Protection Agency to a Cabinet-level Department. The testimony 
at the hearing favored elevating EPA. Witnesses at the hearing 
were: Senator Barbara Boxer (D-CA), the bill's sponsor; 
Representative Sherwood L. Boehlert (R-NY); EPA Administrator 
Christine Todd Whitman; former EPA Administrators Carol M. 
Browner and William K. Reilly; and former EPA General Counsel 
E. Donald Elliott.

                          REGULATORY OVERSIGHT

    The Committee held 2 days of hearings regarding the Bush 
Administration's implementation of environmental laws. 
Witnesses testifying on March 7, 2002, provided an overview of 
actions taken during the first year of the Bush administration. 
Senator Larry E. Craig (R-ID) and Senator James M. Jeffords (I-
VT) testified on the first panel. The Administrator of the 
Environmental Protection Agency, Christine Todd Whitman, 
testified on behalf of the Administration and focused on 
President Bush's ``Clear Skies'' proposal, an idea for a 
legislative initiative to change the Clean Air Act. She also 
responded to Committee members' concerns regarding expected 
changes in the New Source Review (NSR) program, promising the 
Administration would not undermine the Clean Air Act.
    Eric V. Schaeffer, former Director of the Office of 
Regulatory Enforcement of EPA, testified regarding the adverse 
impact on EPA's enforcement program of personnel reductions; he 
also described the EPA's difficulty obtaining settlement 
agreements in actions against industry to enforce emissions 
requirements as a result of the Administration's discussion of 
its plans to revise regulations for NSR. E. Donald Elliott, a 
Yale and Georgetown Law Schools Professor and former EPA 
General Counsel, testified that he believed the NSR program was 
a failure.
    Two witnesses described a range of Administration 
activities they believed undermined implementation of 
environmental laws, including changes in regulations, agency 
policies and practices and the settlement of lawsuits 
challenging environmental regulations. Thomas O. McGarity, a 
law professor from the University of Texas, testified that the 
Administration had taken steps to reverse or modify existing 
protective programs, and was re-establishing a more aggressive 
role for the Office of Information and Regulatory Affairs, 
Office of Management and Budget, in reviewing regulations. 
Gregory S. Wetstone, representing the Natural Resources Defense 
Council, submitted a report analyzing actions throughout the 
government and identifying ``more than 60 environmental 
retreats on issues ranging from clean air, to clean water, to 
protection of National Parks, wildlife, wetlands and forests.''
    On March 13, 2002, citizens who had experienced first hand 
the impact of the change in environmental policies testified 
about their concerns: The impact of changes in diesel emission 
regulations, efficiency standards for air conditioners, and 
requirements to upgrade controls on power plants on air 
pollution; the effect of snowmobiles in Yellowstone National 
Park on the air quality and enjoyment of the park; the adverse 
impact of combined animal feeding operations on water quality 
and the critical need to improve the regulations; the inability 
of citizens to successfully oppose mining operations in areas 
posing risks to safety and the environment; and the impact of 
accelerated energy development (occurring without appropriate 
environmental analysis) on the land, wildlife habitat, and 
water quality in the West. A representative of the Reason 
Public Policy Institute described voluntary, cooperative, and 
locally-derived environmental policy approaches which he 
testified have accomplished results without the negative 
effects of regulatory requirements.
    The witnesses appearing on March 13 were: Richard 
Blumenthal, Attorney General, State of Connecticut; Richard J. 
Dove, Southeastern Representative, Waterkeeper Alliance; 
Kenneth Green, Chief Environmental Scientist, Reason Public 
Policy Institute; Donald Newhouse, Guardians of the Rural 
Environment; Hope Sieck, Associate Program Director, Greater 
Yellowstone Coalition; Stephen C. Torbit, Senior Scientist, 
Rocky Mountain Natural Resource Center, on behalf of the 
National Wildlife Federation.

          COMMISSION ON THE TERRORIST ATTACKS OF SEPTEMBER 11

    On February 7, 2002, the Committee held a hearing to 
consider S. 1867, legislation introduced by Chairman Lieberman 
to create an independent commission to investigate the 
terrorist attacks of September 11, 2001. Four witnesses 
discussed how an independent commission could help the Nation 
address unanswered questions and contribute to the war on 
terrorism. All of the witnesses had served on independent 
commissions addressing important national security issues. 
Witnesses included Norman R. Augustine, Chairman of the 
Executive Committee, Lockheed Martin Corporation, former 
Commissioner, U.S. Commission on National Security; Professor 
Richard K. Betts, Director, Institute of War and Peace Studies, 
Columbia University, former Commissioner, National Commission 
on Terrorism; Dave McCurdy, President, Electronic Industries 
Alliance, former Commissioner, Commission to Assess the 
Organization of the Federal Government to Combat the 
Proliferation of Weapons of Mass Destruction; and Maurice 
Sonnenberg, Senior International Advisor, Bear, Stearns and 
Company, Inc., and former Vice Chair, National Commission on 
Terrorism.

                         ELECTRONIC GOVERNMENT

    On July 11, 2001, the Committee held a hearing to consider 
S. 803, the E-Government Act, a bill introduced by Chairman 
Lieberman. The witnesses at the hearing testified to the 
potential of the Internet and other information technologies to 
provide information and services, organized to citizens' needs, 
and to transform the way government operates. The E-Government 
Act was ultimately enacted as H.R. 2458. Witnesses at the 
hearing included Senator Conrad Burns (R-MT), chief co-sponsor 
of S. 803; Sean O'Keefe, Deputy Director, Office of Management 
and Budget; Anne K. Altman, Managing Director, U.S. Federal-IBM 
Corporation; Dr. Costis Toregas, President, Public Technology, 
Inc.; Aldona Valicenti, President, National Association of 
State Chief Information Officers; Greg Woods, Chief Operating 
Officer, Student Financial Assistance, U.S. Department of 
Education; Sharon A. Hogan, University Librarian, University of 
Illinois at Chicago, on behalf of the American Library 
Association, the American Association of Research Libraries and 
the American Association of Law Libraries; Barry Ingram, Vice 
President and Chief Technology Officer, EDS Global Government 
Industry Group, on behalf of the Information Technology 
Association of America (ITAA); Patricia McGinnis, President and 
Chief Executive Officer, Council for Excellence in Government; 
and Joseph R. Wright, former Director and Deputy Director, 
Office of Management and Budget, and Vice Chairman, Terremark 
Worldwide, Inc.

                            ELECTION REFORM

    On May 3 and May 9, 2001, the Governmental Affairs 
Committee held 2 days of hearings, entitled ``Federal Election 
Practices and Procedures,'' which explored the flaws in the 
voting system in the United States and discussed possible 
solutions.
    The hearings were divided according to the two major 
hurdles citizens face with respect to participating in any 
election: (1) getting to the polls, including registering to 
vote, and (2) voting at the polls, including getting ballots 
cast and counted. Voters were disenfranchised in the November 
2000 election in two ways: Some never made it past the front 
desk of the polling place, because they were told that they 
were not registered to vote. Others were able to vote, but did 
not succeed in casting the ballots they intended, often because 
they were foiled by faulty voting equipment, poor ballot 
design, unclear voting instructions, long lines, ballots not 
translated into their language, polling places that were moved 
without notice, and poorly trained poll workers, who 
misinformed, rushed, harassed or refused to assist voters. 
Witnesses, including Senator Christopher S. ``Kit'' Bond (R-
MO), also expressed concern about fraud at the polls, and the 
need for better verification of those qualified to vote through 
a more effective registration process.
    At the hearing on May 3, 2001, the Committee heard from 
four panels of witnesses, including Senator Bond and 
Representative William Lacy Clay (D-MO); Carolyn Jefferson-
Jenkins, President of the League of Women Voters; Ralph G. 
Neas, President of People for the American Way; Deborah M. 
Phillips, Chairman of The Voting Integrity Project; Professor 
Larry J. Sabato of the University of Virginia; Professor R. 
Michael Alvarez of the California Institute of Technology; John 
T. Willis, Maryland Secretary of State; Gary McIntosh, State 
Elections Director for Washington State; and Daniel B. Perrin 
of the Committee for Honest Politics.
    At the May 9 hearing, the Committee heard from Hilary O. 
Shelton, Washington Bureau Director of the NAACP; Arturo 
Vargas, Executive Director of the National Association of 
Latino Elected and Appointed Officials; Stephen Knack, Senior 
Research Economist at The World Bank; Hans A. von Spakovsky of 
the Fulton County, Georgia Board of Registration and Elections; 
Conny B. McCormack, Registrar-Recorder/County Clerk of Los 
Angeles County, California; Sharon Priest, Arkansas Secretary 
of State; R. Doug Lewis, Executive Director of The Election 
Center; and Samuel F. Wright, Co-Chair of the Uniformed 
Services Voting Rights Committee of the Reserve Officers 
Association.
    The hearings yielded a number of possible solutions to 
protect voters from facing the same hurdles they encountered in 
the 2000 elections. To address difficulties voters had found 
because of faulty registration lists, witnesses emphasized the 
critical importance of having a centralized database of 
registered voters--ideally, one that is tied with other 
databases such as the Department of Motor Vehicles, so that the 
list of registered voters would be accurate and up-to-date. A 
number of witnesses also encouraged States to permit voters to 
cast provisional ballots, so the voters' qualifications could 
be checked by the registrar after Election Day but before the 
results are certified, and the votes counted if appropriate. To 
address problems at the polls, witnesses stressed that voting 
machines were one part of the problem; though in many instances 
the technology posed unnecessary challenges to voters--
particularly where punch card machines were in use--all agreed 
that better voter education and better poll worker retention 
and training would also make an importance difference in 
ensuring that all votes cast would be counted. However, several 
witnesses warned that efforts to increase access to the polls 
for legitimate voters could lead to actual and potential fraud. 
They suggested combating fraud by making registration and 
voting more restrictive in certain ways, such as a requirement 
that voters show picture identification at the polls.

    STREAMLINING FINANCIAL DISCLOSURE FOR EXECUTIVE BRANCH NOMINEES

    On April 4 and 5, 2001, the Committee held 2 days of 
hearings, entitled ``The State of the Presidential Appointment 
Process,'' on ways to streamline the financial disclosure 
process for Executive Branch nominees, while also strengthening 
disclosure of actions those nominees take once in office 
regarding potential conflicts of interest. Witnesses testified 
about the barriers to finding and confirming qualified and 
talented individuals. A recurring complaint has been the 
burdensome nature of the financial disclosure nominees must 
make. In addition, the Office of Government Ethics (OGE) 
presented a report it was directed to prepare pursuant to the 
Presidential Transition Act of 2000 regarding financial 
disclosure requirements for Executive Branch nominees and 
appointees. The testimony recommended steps Congress could take 
to improve the nomination process for high level Executive 
Branch positions, including avoiding duplication and overlap 
between various financial disclosure forms and focusing the 
information sought on the areas required for conflict of 
interest determinations. Scott Harshbarger, testifying on 
behalf of Common Cause, expressed the view that while some 
changes were warranted, OGE's proposal was too drastic in 
scope.
    Witnesses at the hearings included OGE Executive Director 
Amy L. Comstock; Paul C. Light, Vice President and Director of 
Governmental Studies at The Brookings Institute. Franklin D. 
Raines, former Director, Office of Management and Budget, and 
former Senator Nancy Kassebaum Baker, who appeared on behalf of 
the Presidential Appointee Initiative; Common Cause President 
Scott Harshbarger; Norman J. Ornstein, Resident Scholar, 
American Enterprise Institute, on behalf of the Transition to 
Governing Project; OMB Deputy Director Sean O'Keefe; former 
Director of White House Office of Presidential Personnel Robert 
J. Nash; Colby College Professor G. Calvin Mackenzie; and 
Patricia McGinnis, President and CEO of the Council for 
Excellence in Government.
    Following these hearings, through the efforts of Chairman 
Lieberman and Ranking Minority Member Thompson, the Committee 
revised its own financial disclosure forms for nominees 
considered by the Committee. The Committee also produced a 
multi-volume compilation of past commission reports on the 
financial disclosure process.

                           D.C. VOTING RIGHTS

    On May 23, 2002, the Committee held a hearing entitled 
``Voting Representation in Congress for Citizens of the 
District of Columbia,'' marking the first time since 1994 that 
Congress has held a hearing on the question of whether citizens 
of our Nation's capital should be granted full voting 
representation in Congress. Proponents of voting representation 
for District residents contended that D.C. residents should 
have the same rights to participate in democracy as citizens of 
the 50 States. They told the Committee that depriving District 
residents of full representation in the Congress is 
inconsistent with the representative democracy that was 
envisioned by the framers, which fundamentally derives its 
authority from the consent of the governed. The witnesses 
testified that District residents share the same burden of 
citizenship as other Americans, including paying their share of 
Federal income taxes and fighting in foreign wars; therefore, 
the legislators making decisions about these and other 
matters--particularly those directly related to the District--
should be accountable to its residents.
    Expert witnesses discussed the most effective methods to 
achieve full Congressional representation for the District. 
Washington College of Law Professor Jamin B. Raskin, American 
University, testified that Congress could effect this goal 
through legislation, while Professor Adam H. Kurland of Howard 
University Law School testified that a constitutional amendment 
would be necessary. Other witnesses included Senator Russell D. 
Feingold (D-WI); Delegate Eleanor Holmes Norton (D-DC); 
Representative Eddie Bernice Johnson (D-TX), Chair of the 
Congressional Black Caucus; D.C. Mayor Anthony A. Williams; 
D.C. Council Chairman Linda W. Cropp; D.C. Statehood Senator 
Florence H. Pendleton; and Wade Henderson, Executive Director 
of the Leadership Conference for Civil Rights. Representative 
Ralph Regula (D-OH) submitted a prepared statement.

                  PROTECTING PUBLIC HEALTH AND SAFETY

    The Committee held three hearings relating to public health 
and safety issues:

    The first hearing on drug and alcohol abuse, entitled 
``Ecstasy Use Rises: What More Needs to be Done by the 
Government to Combat the Problem?'' was held on July 30, 2001. 
It sought to bring attention to the harm that ecstasy poses to 
America's communities. Representatives from the Drug 
Enforcement Administration, Customs Service, Office of National 
Drug Control Policy, and the Miami-Dade Police Department 
provided the Committee with graphic evidence of the growing 
scope of ecstasy trafficking. They noted that the trade is no 
longer just confined to Western Europe, where the drug is 
largely manufactured, but is now a worldwide phenomenon. The 
agencies acknowledged the need for closer coordination and 
cited examples of interagency cooperation. Appearing before the 
Committee were two recovering teenage addicts from the Phoenix 
House Drug Rehabilitation Center in Long Island, New York, who 
testified about the drug's impact on their lives. Other 
witnesses included John M. Bailey, Connecticut Chief State's 
Attorney; Joseph D. Keefe, Chief of Operations, Drug 
Enforcement Administration, U.S. Department of Justice; Alan I. 
Leshner, Director of the National Institute on Drug Abuse, 
National Institute of Health; Roy Rutland, with the Miami-Dade 
Police Department; John C. Varrone, Assistant Commissioner of 
Customs at the United States Customs Service; Donald R. Vereen, 
Jr., Deputy Director, Office of National Drug Control Policy, 
Executive Office of the President.
    On May 15, 2002, in response to six deaths of Connecticut 
college students in 1 year due to excessive drinking, Senator 
Lieberman held a hearing, entitled ``Under the Influence: The 
Binge Drinking Epidemic on College Campuses.'' The hearing 
examined the high numbers of alcohol-related student deaths and 
accidents on college campuses across the country and 
recommended strategies to address it.
    Among the witnesses was Mark S. Goldman, Director of the 
Alcohol and Substance Abuse Research Institute, University of 
Florida. He presented a recently published study illustrating 
the seriousness of heavy, episodic drinking on college 
campuses. The study found that each year, college drinking 
contributes to 1,400 deaths, 70,000 sexual assaults or rapes, 
and 500,000 injuries. Other witnesses at the hearing were Ralph 
H. Hingson, Professor and Associate Dean for Research at the 
School of Public Health, Boston University; Raynard S. Kington, 
Acting Director of National Institute on Alcohol Abuse and 
Alcoholism at the National Institute on Health; Drew Hunter, 
Executive Director of The BACCHUS and GAMMA Peer Education 
Network; Robert F. Nolan, Chief of Police at the Hamden, 
Connecticut, Police Department; Daniel P. Reardon, parent; and 
John D. Welty, President of California State University in 
Fresno.
    On June 12, 2002 the Committee held a hearing, entitled 
``Protecting Our Kids: What Is Causing the Current Shortage in 
Childhood Vaccines?'' on the shortages of childhood vaccines 
for significant diseases. The hearing focused on the degree of 
the problem, as well as potential solutions and long-term 
consequences if not addressed. Witnesses included Timothy F. 
Doran, Chairman, Department of Pediatrics, Greater Baltimore 
Medical Center on behalf of the American Academy of Pediatrics; 
Mary Anne Jackson, Chief, Pediatric Infectious Diseases 
Section, Children's Mercy Hospitals and Clinics, Kansas City, 
Missouri; Wayne F. Pisano, Executive Vice President, Aventis 
Pasteur North America, on behalf of Pharmaceutical Research and 
Manufacturers of America; Lester M. Crawford, Deputy 
Commissioner, Food and Drug Administration, U.S. Department of 
Health and Human Services; and Walter A. Orenstein, Director, 
National Immunization Program, Centers for Disease Control and 
Prevention, U.S. Department of Health and Human Services

            MEDICARE PAYMENT POLICIES FOR AMBULANCE SERVICES

    The Committee held an oversight hearing on November 15, 
2001, entitled ``Oversight of the Centers for Medicare and 
Medicaid Services: Medicare Payment Policies for Ambulance 
Services''; the hearing examined the proposed changes in 
Medicare reimbursement of ambulance services and the impact 
those changes would have on the beneficiaries who rely on them. 
Witnesses included Thomas A. Scully, Administrator, Centers for 
Medicare and Medicaid Services, U.S. Department of Health and 
Human Services; Mark D. Lindquist, Medical Director, Emergency 
Department, St. Mary's Regional Health Center; Gary L. 
Wingrove, Paramedic and Manager, Gold Cross Ambulance Service, 
on behalf of the Minnesota Ambulance Association; Mark D. 
Meijer, Owner and CEO, Life EMS Ambulance Service, on behalf of 
the American Ambulance Association; James N. Pruden, Chairman, 
New Jersey EMS Coalition; Laura A. Dummit, Director, Health 
Care--Medicare Payment Issues, U.S. General Accounting Office; 
Lori Moore, Assistant to the General President for EMS 
Services, International Association of Firefighters; Deputy 
Chief John Sinclair, Secretary, Emergency Medical Services 
Section of the International Association of Fire Chiefs.

                         ENTERTAINMENT RATINGS

    On July 25, 2001, the Committee held a hearing called 
``Rating Entertainment Ratings: How Well Are They Working For 
Parents and What Can Be Done To Improve Them?'' The hearing 
focused on a letter sent to policymakers in June 2001 by a 
coalition of researchers, medical groups, and child development 
experts. The letter, initiated by the National Institute on 
Media and the Family, argued that the different ratings are 
often applied inconsistently, that many parents find the 
multiplicity of rating icons confusing, and called for 
replacing the existing formats with a new uniform rating 
system, monitored by an independent oversight committee and 
grounded in sound research. The witnesses at the hearing 
discussed the concerns raised in the letter and explored the 
merits of their recommendations, presented the response of 
industry keepers of these rating systems, and discussed 
possible ways to improve the ratings to better inform parents 
and better protect children.
    Witnesses included Senator Sam Brownback (R-KS); Dale 
Kunkel, Professor of Communication, University of California, 
Santa Barbara; Roger Pilon, Vice President for Legal Affairs, 
CATO Institute; Dr. Michael Rich, Assistant Professor of 
Pediatrics, Harvard Medical School; Laura Smit, mother; William 
Baldwin, President, The Creative Coalition; Douglas Lowenstein, 
President, Interactive Digital Software Association; Doug 
McMillon, Senior Vice President and General Merchandise 
Manager, Wal-Mart Stores, Inc.; Hillary Rosen, President and 
CEO, Recording Industry Association of America; Jack Valenti, 
President and CEO of The Motion Picture Association of America; 
and Russell Simmons, Chairman, Phat Farm.

               HIGH PERFORMANCE COMPUTER EXPORT CONTROLS

    On March 15, 2001, the Committee held a hearing to discuss 
a GAO report on the changes in export control policy regarding 
high performance computers. The hearing focused on these 
computers as ``dual use'' commodities--their use and potential 
use for military purposes in countries known to be 
proliferating weapons of mass destruction.
    Witnesses included Susan S. Westin, Managing Director, 
accompanied by Stephen M. Lord, Assistant Director, and Jeffrey 
D. Phillips, International Security Analyst, International 
Affairs and Trade Division, U.S. General Accounting Office.

                 FEDERAL AND SERVICE CONTRACT WORKFORCE

    On March 6, 2002, the Committee held a hearing to review 
the Administration's initiatives to increase the outsourcing of 
Federal services to the private sector, and how these 
initiatives affect the quality and cost of work performed for 
and by the Federal Government. The hearing focused on the 
Administration's numerical goals to increase competitions and 
conversions of Federal jobs; many have criticized the numerical 
quotas as being arbitrary and unrealistic. The hearing also 
addressed proposed legislation to allow Federal workers to 
compete more frequently for jobs being outsourced, and, in some 
cases, for new work.
    Witnesses included Angela B. Styles, Administrator, Office 
of Federal Procurement Policy, Office of Management and Budget; 
Barry W. Holman, Director, Defense Capabilities and Management, 
U.S. General Accounting Office; Dan Guttman, Fellow, Washington 
Center for the Study of American Government, Johns Hopkins 
University; Bobby L. Harnage, Sr., National President, American 
Federation of Government Employees, AFL-CIO; Colleen M. Kelley, 
National President, National Treasury Employees Union (NTEU); 
Mary Lou Patel, Chief Financial Officer, Advanced System 
Development, Inc.; Stan Z. Soloway, President, Professional 
Services Council.

              V. Reports, Prints, Studies, and GAO Reports

    During the 107th Congress, the Committee prepared and 
issued 31 reports, prints, and studies on these topics:

       (1) Activities of the Committee on Governmental Affairs 
(For the 105th Congress) (S. Rept. 107-1);
       (2) Activities of the Committee on Governmental Affairs 
(For the 106th Congress) (S. Rept. 107-20);
       (3) Office of Government Ethics Authorization Act of 
2001 (S. Rept. 107-88);
       (4) To Prevent the Elimination of Certain Reports (S. 
Rept. 107-90);
       (5) Climate Change Strategy and Technology Innovation 
Act of 2001 (S. Rept. 107-99);
       (6) District of Columbia College Access Improvement Act 
of 2001 (S. Rept. 107-101);
       (7) Amending the charter of Southeastern University of 
the District of Columbia (S. Rept. 107-102);
       (8) District of Columbia Police Coordination Amendment 
Act of 2001 (S. Rept. 107-103);
       (9) District of Columbia Family Court Act of 2001 (S. 
Rept. 107-107);
       (10) District of Columbia Family Court Act of 2001 (S. 
Rept. 107-108);
       (11) Making Permanent the Authority to Redact Financial 
Disclosure Statements of Judicial Employees and Judicial 
Officers (S. Rept. 107-111);
       (12) Amending chapter 90 of title 5, United States Code, 
relating to Federal long-term care insurance (S. Rept. 107-
128);
       (13) Phony Identification And Credentials Via The 
Internet (S. Rept. 107-133);
       (14) To require that Federal agencies be accountable for 
violations of antidiscrimination and whistleblower protection 
laws; to require that each Federal agency post quarterly on its 
public Web site, certain statistical data relating to Federal 
sector equal employment opportunity complaints filed with each 
agency; and for other purposes (S. Rept. 107-143);
       (15) To authorize certain Federal officials with 
responsibility for the administration of the criminal justice 
system of the District of Columbia to serve on and participate 
in the activities of the District of Columbia Criminal Justice 
Coordinating Council, and for other purposes (S. Rept. 107-
145);
       (16) To establish the National Commission on Terrorist 
Attacks Upon the United States, and for other purposes (S. 
Rept. 107-150);
       (17) To amend the Ethics in Government Act of 1978 (5 
U.S.C. App.) to streamline the financial disclosure process for 
Executive Branch employees (S. Rept. 107-152);
       (18) To amend chapter 35 of title 44, United States 
Code, for the purpose of facilitating compliance by small 
business concerns with certain Federal paperwork requirements, 
to establish a task force to examine the feasibility of 
streamlining paperwork requirements applicable to small 
business concerns, and for other purposes (S. Rept. 107-153);
       (19) To amend title 44, United States Code, to require 
any organization that is established for the purpose of raising 
funds for creating, maintaining, expanding, or conducting 
activities at a Presidential archival depository or any 
facilities relating to a Presidential archival depository to 
disclose the sources and amounts of any funds raised, and for 
other purposes (S. Rept. 107-160);
       (20) To enhance the management and promotion of 
electronic government services and processes by establishing a 
Federal Chief Information Officer within the Office of 
Management and Budget, and by establishing a broad framework of 
measures that require using Internet-based information 
technology to enhance citizen access to government information 
and services, and for other purposes (S. Rept. 107-174);
       (21) To establish the Department of National Homeland 
Security and the National Office for Combating Terrorism (S. 
Rept. 107-175);
       (22) To amend the Inspector General Act of 1978 (5 
U.S.C. App.) to establish police powers for certain Inspector 
General agents engaged in official duties and provide an 
oversight mechanism for the exercise of those powers (S. Rept. 
107-176);
       (23) To establish the United States Consensus Council to 
provide for a consensus building process in addressing national 
public policy issues, and for other purposes (S. Rept. 107-
330);
       (24) To amend chapter 35 of title 31, United States 
Code, to expand the types of Federal agencies that are required 
to prepare audited financial statements (S. Rept. 107-331);
       (25) To authorize the Court Services and Offender 
Supervision Agency of the District of Columbia to provide for 
the interstate supervision of offenders on parole, probation, 
and supervised release (S. Rept. 107-332);
       (26) To provide for estimates and reports of improper 
payments by Federal agencies (S. Rept. 107-333);
       (27) To provide for full voting representation in 
Congress for the citizens of the District of Columbia, and for 
other purposes (S. Rept. 107-343);
       (28) To authorize appropriations for the Merit Systems 
Protection Board and the Office of Special Counsel, and for 
other purposes (S. Rept. 107-349);
       (29) Financial Oversight of Enron: The SEC and Private-
Sector Watchdogs, October 7, 2002 (S. Prt. 107-75);
       (30) Rewriting the Rules (Majority Staff), October 24, 
2002 (S. Prt. 107-76); and
       (31) Enron's Credit Rating: Enron's Bankers' Contacts 
with Moody's and Government Officials, January 3, 2003 (S. Prt. 
107-83).

    Also during the 107th Congress, 91 reports were issued by 
the General Accounting Office at the request of the Committee:

       (1) Potential Questions to Elicit Nominees' Views on 
Agencies' Management Challenges, GAO-01-332R (January 18, 
2001);
       (2) Regulatory Management: Communication About 
Technology-Based Innovations Can Be Improved, GAO-01-232 
(February 12, 2001);
       (3) Information Security: IRS Electronic Filing Systems, 
GAO-01-306 (February 16, 2001);
       (4) Eligibility Criteria for Individuals to Temporarily 
Fill Vacant Positions Under the Federal Vacancies Reform Act of 
1998, GAO-01-468R (February 23, 2001);
       (5) Export Controls: Inadequate Justification for 
Relaxation of Computer Controls Demonstrates Need for 
Comprehensive Study, GAO-01-534T (March 15, 2001);
       (6) Financial Audit: Independent and Special Counsel 
Expenditures for the Six Months Ended September 30, 2000, GAO-
01-505 (March 30, 2001);
       (7) Managing for Results: Human Capital Management 
Discussions in Fiscal Year 2001 Performance Plans, GAO-01-236 
(April 24, 2001);
       (8) Internet Privacy: Implementation of Federal Guidance 
for Agency Use of Cookies, GAO-01-424 (April 27, 2001);
       (9) Telecommunications: Research and Regulatory Efforts 
on Mobile Phone Health Issues, GAO-01-545 (May 7, 2001);
       (10) Department of Defense, General Services 
Administration, National Aeronautics and Space Administration: 
Federal Acquisition Regulations; Electronic and Information 
Technology Accessibility, GAO-01-687R (May 11, 2001);
       (11) U.S. Postal Service: Financial Outlook and 
Transformation Challenges, GAO-01-733T (May 15, 2001);
       (12) Presidential Appointments: Agencies' Compliance 
With Provisions of the Federal Vacancies Reform Act of 1998, 
GAO-01-701 (May 31, 2001);
       (13) Department of the Treasury: Status of Achieving Key 
Outcomes and Addressing Major Management Challenges, GAO-01-712 
(June 15, 2001);
       (14) Health and Human Services: Status of Achieving Key 
Outcomes and Addressing Major Management Challenges, GAO-01-748 
(June 15, 2001);
       (15) Veterans Affairs: Status of Achieving Key Outcomes 
and Addressing Major Management Challenges, GAO-01-752 (June 
15, 2001);
       (16) National Science Foundation: Status of Achieving 
Key Outcomes and Addressing Major Management Challenges, GAO-
01-758 (June 15, 2001);
       (17) Department of the Interior: Status of Achieving Key 
Outcomes and Addressing Major Management Challenges, GAO-01-759 
(June 15, 2001);
       (18) Environmental Protection Agency: Status of 
Achieving Key Outcomes and Addressing Major Management 
Challenges, GAO-01-774 (June 15, 2001);
       (19) Social Security Administration: Status of Achieving 
Key Outcomes and Addressing Major Management Challenges, GAO-
01-778 (June 15, 2001);
       (20) Department of Labor: Status of Achieving Key 
Outcomes and Addressing Major Management Challenges, GAO-01-779 
(June 15, 2001);
       (21) Department of Commerce: Status of Achieving Key 
Outcomes and Addressing Major Management Challenges, GAO-01-793 
(June 15, 2001);
       (22) Small Business Administration: Status of Achieving 
Key Outcomes and Addressing Major Management Challenges, GAO-
01-792 (June 22, 2001);
       (23) Department of Transportation: Status of Achieving 
Key Outcomes and Addressing Major Management Challenges, GAO-
01-834 (June 22, 2001);
       (24) Department of Defense: Status of Achieving Key 
Outcomes and Addressing Major Management Challenges, GAO-01-783 
(June 25, 2001);
       (25) Nuclear Regulatory Commission: Status of Achieving 
Key Outcomes and Addressing Major Management Challenges, GAO-
01-760 (June 29, 2001);
       (26) Department of Energy: Status of Achieving Key 
Outcomes and Addressing Major Management Challenges, GAO-01-823 
(June 29, 2001);
       (27) Department of Education: Status of Achieving Key 
Outcomes and Addressing Major Management Challenges, GAO-01-827 
(June 29, 2001);
       (28) Department of Housing and Urban Development: Status 
of Achieving Key Outcomes and Addressing Major Management 
Challenges, GAO-01-833 (July 6, 2001);
       (29) Federal Emergency Management Agency: Status of 
Achieving Key Outcomes and Addressing Major Management 
Challenges, GAO-01-832 (July 9, 2001);
       (30) Office of Personnel Management: Status of Achieving 
Key Outcomes and Addressing Major Management Challenges, GAO-
01-884 (July 9, 2001);
       (31) Electronic Government: Challenges Must Be Addressed 
With Effective Leadership and Management, GAO-01-959T (July 11, 
2001);
       (32) FBI Intelligence Investigations: Coordination 
Within Justice on Counterintelligence Criminal Matters Is 
Limited, GAO-01-780 (July 16, 2001);
       (33) Department of Justice: Status of Achieving Key 
Outcomes and Addressing Major Management Challenges, GAO-01-729 
(July 26, 2001);
       (34) NASA: Status of Achieving Key Outcomes and 
Addressing Major Management Challenges, GAO-01-868 (July 31, 
2001);
       (35) General Services Administration: Status of 
Achieving Key Outcomes and Addressing Major Management 
Challenges, GAO-01-931 (August 3, 2001);
       (36) U.S. Agency for International Development: Status 
of Achieving Key Outcomes and Addressing Major Management 
Challenges, GAO-01-721 (August 17, 2001);
       (37) Department of Agriculture: Status of Achieving Key 
Outcomes and Addressing Major Management Challenges, GAO-01-761 
(August 23, 2001);
       (38) Presidential Appointments: Qualifications of Acting 
Officials at the Department of Justice Under the Federal 
Vacancies Reform Act of 1998, GAO-01-1083R (September 6, 2001);
       (39) Public Assistance: PARIS Project Can Help States 
Reduce Improper Benefit Payments, GAO-01-935 (September 6, 
2001);
       (40) Critical Infrastructure Protection: Significant 
Challenges in Protecting Federal Systems and Developing 
Analysis and Warning Capabilities, GAO-01-1132T (September 12, 
2001);
       (41) Homeland Security: A Framework for Addressing the 
Nation's Efforts, GAO-01-1158T (September 21, 2001);
       (42) Financial Audit: Independent and Special Counsel 
Expenditures for the Six Months Ended March 31, 2001, GAO-01-
1035 (September 28, 2001);
       (43) Electronic Government: Better Information Needed on 
Agencies' Implementation of the Government Paperwork 
Elimination Act, GAO-01-1100 (September 28, 2001);
       (44) Financial Management: FFMIA Implementation Critical 
for Federal Accountability, GAO-02-29 (October 1, 2001);
       (45) Combating Terrorism: Considerations for Investing 
Resources in Chemical and Biological Preparedness, GAO-02-162T 
(October 17, 2001);
       (46) Homeland Security: A Risk Management Approach Can 
Guide Preparedness Efforts, GAO-02-208T (October 31, 2001);
       (47) Financial Management: Improper Payments Reported in 
Fiscal Year 2000 Financial Statements, GAO-02-131R (November 2, 
2001);
       (48) Ambulance Services: Changes Needed to Improve 
Medicare Payment Policies and Coverage Decisions, GAO-02-244T 
(November 15, 2001);
       (49) NASA: Status of Plans for Achieving Key Outcomes 
and Addressing Major Management Challenges, GAO-02-184 
(November 27, 2001);
       (50) Changed Interpretation of Requirements Related to 
First Assistants Under the Federal Vacancies Reform Act of 
1998, GAO-02-272R (December 7, 2001);
       (51) Department of State: Status of Achieving Key 
Outcomes and Addressing Major Management Challenges, GAO-02-42 
(December 7, 2001);
       (52) United States Postal Service: Information on 
Retirement Plans, GAO-02-170 (December 31, 2001);
       (53) 2000 Census: Coverage Evaluation Interviewing 
Overcame Challenges, but Further Research Needed, GAO-02-26 
(December 31, 2001);
       (54) Managing for Results: Agency Progress in Linking 
Performance Plans With Budgets and Financial Statements, GAO-
02-236 (January 4, 2002);
       (55) Charitable Choice: Overview of Research Findings on 
Implementation, GAO-02-337 (January 18, 2002);
       (56) Human Services Integration: Results of a GAO 
Cosponsored Conference on Modernizing Information Systems, GAO-
02-121 (January 31, 2002);
       (57) 2000 Census: Best Practices and Lessons Learned for 
More Cost-Effective Nonresponse Follow-up, GAO-02-196 (February 
11, 2002);
       (58) Regulatory Review: Delay of Effective Dates of 
Final Rules Subject to Administration's January 20, 2001, 
Memorandum, GAO-02-370R (February 15, 2002);
       (59) Information Technology: Enterprise Architecture Use 
Across the Federal Government Can Be Improved, GAO-02-6 
(February 19, 2002);
       (60) Information Resources Management: Comprehensive 
Strategic Plan Needed to Address Mounting Challenges, GAO-02-
292 (February 22, 2002);
       (61) U.S. Postal Service: Deteriorating Financial 
Outlook Increases Need for Transformation, GAO-02-355 (February 
28, 2002);
       (62) Competitive Sourcing: Challenges in Expanding A-76 
Government wide, GAO-02-498T (March 6, 2002);
       (63) Financial Audit: Independent and Special Counsel 
Expenditures for the Six Months Ended September 30, 2001, GAO-
02-443 (March 29, 2002);
       (64) Electronic Government: Challenges to Effective 
Adoption of the Extensible Markup Language, GAO-02-327 (April 
5, 2002);
       (65) Homeland Security: Responsibility and 
Accountability for Achieving National Goals, GAO-02-627T (April 
11, 2002);
       (66) Export Controls: Rapid Advances in China's 
Semiconductor Industry Underscore Need for Fundamental U.S. 
Policy Review, GAO-02-620 (April 19, 2002);
       (67) Performance Reporting: Few Agencies Reported on the 
Completeness and Reliability of Performance Data, GAO-02-372 
(April 26, 2002);
       (68) Energy Markets: Concerted Actions Needed by FERC To 
Confront Challenges That Impede Effective Oversight, GAO-02-656 
(June 14, 2002);
       (69) Homeland Security: New Department Could Improve 
Coordination but May Complicate Priority Setting, GAO-02-893T 
(June 28, 2002);
       (70) Critical Infrastructure Protection: Federal Efforts 
Require a More Coordinated and Comprehensive Approach for 
Protecting Information Systems, GAO-02-474 (July 15, 2002);
       (71) SEC Operations: Implications of Alternative Funding 
Structures, GAO-02-864 (July 16, 2002);
       (72) Contract Management: Interagency Contract Programs 
Need More Oversight, GAO-02-734 (July 25, 2002);
       (73) Human Capital Flexibilities, GAO-02-1050R (August 
9, 2002);
       (74) Financial Management: Coordinated Approach Needed 
to Address the Government's Improper Payments Problems, GAO-02-
749 (August 9, 2002);
       (75) Charitable Choice: Federal Guidance on Statutory 
Provisions Could Improve Consistency of Implementation, GAO-02-
887 (September 10, 2002);
       (76) Building Security: Interagency Security Committee 
Has Had Limited Success in Fulfilling Its Responsibilities, 
GAO-02-1004 (September 17, 2002);
       (77) Information Management: Selected Agencies' Handling 
of Personal Information, GAO-02-1058 (September 30, 2002);
       (78) Financial Audit: Independent Counsel Expenditures 
for the Six Months Ended March 31, 2002, GAO-02-1068 (September 
30, 2002);
       (79) Program Evaluation: Strategies for Assessing How 
Information Dissemination Contributes to Agency Goals, GAO-02-
923 (September 30, 2002);
       (80) Financial Management: FFMIA Implementation 
Necessary to Achieve Accountability, GAO-03-31 (October 1, 
2002);
       (81) United States Postal Service: Opportunities to 
Strengthen IT Investment Management Capabilities, GAO-03-3 
(October 15, 2002);
       (82) Nonproliferation: Strategy Needed to Strengthen 
Multilateral Export Control Regimes, GAO-03-43 (October 25, 
2002);
       (83) Performance and Accountability: Reported Agency 
Actions and Plans to Address 2001 Management Challenges and 
Program Risks, GAO-03-225 (October 31, 2002);
       (84) Building Security: Security Responsibilities for 
Federally Owned and Leased Facilities, GAO-03-8 (October 31, 
2002);
       (85) Electronic Government: Selection and Implementation 
of the Office of Management and Budget's 24 Initiatives, GAO-
03-229 (November 22, 2002);
       (86) Human Capital: Effective Use of Flexibilities Can 
Assist Agencies in Managing Their Workforces, GAO-03-2 
(December 6, 2002);
       (87) Information Technology Services: Agencies Complying 
with Revision to Federal Acquisition Regulation, GAO-03-32 
(December 18, 2002);
       (88) Natural Gas: Analysis of Changes in Market Price, 
GAO-03-46 (December 18, 2002);
       (89) Homeland Security: Management Challenges Facing 
Federal Leadership, GAO-03-260 (December 20, 2002);
       (90) Results-Oriented Management: Agency Crosscutting 
Actions and Plans in Drug Control, Family Poverty, Financial 
Institution Regulation, and Public Health Systems, GAO-03-320 
(December 20, 2002); and
       (91) Results-Oriented Management: Agency Crosscutting 
Actions and Plans in Border Control, Flood Mitigation and 
Insurance, Wetlands, and Wildland Fire Management, GAO-03-321 
(December 20, 2002).

                      VI. Official Communications

    During the 107th Congress, 927 official communications were 
referred to the Committee. Of these, 914 were Executive 
Communications, 7 were Petitions or Memorials, 6 were 
Presidential Messages, and 227 of the official communications 
were reports on District of Columbia legislation.

                        VII. Legislative Actions

    The Committee was highly productive in the 107th Congress. 
Important legislation was reported by the Committee, approved 
by Congress and signed by the President in a variety of areas 
within the Committee's jurisdiction.
    The following are brief legislative histories of measures 
referred to the Committee and, in some cases, drafted by the 
Committee, which (1) became public law; (2) were favorably 
reported from the Committee and passed by the Senate; and (3) 
were favorably reported from the Committee but were not subject 
to further action. For information not included in this 
section, refer to the Committee's Legislative Calendar.

                       Measures Enacted Into Law


S. 271/H.R. 93--To Provide That the Mandatory Separation Age for 
        Federal Firefighters Be Made the Same as the Age That Applies 
        With Respect To Federal Law Enforcement Officers (Public Law 
        107-27)

    This legislation raises the mandatory separation age for 
Federal firefighters from 55 to 57, which is the age that had 
already applied with respect to Federal law enforcement 
officers. The purpose of the legislation is to enable willing 
and able Federal fire fighters to continue to serve, and to 
remove the existing inequity that requires firefighters to 
retire at a younger age than law enforcement officers.
    S. 271 was introduced by Senator Feinstein on February 7, 
2001, and garnered 12 cosponsors. The bill was referred to the 
Committee and was further referred to the Subcommittee on 
International Security, Proliferation and Federal Services on 
March 20, 2001. The same measure had been introduced previously 
in the House of Representatives as H.R. 93 on January 3, 2001, 
passed the House on January 30, 2001, and was referred in the 
Senate to the Committee and the Subcommittee. Both bills were 
then polled out by the Subcommittee and, on August 2, 2001, 
were ordered reported favorably by the Committee by voice vote; 
the bills were reported the same day, without written report. 
H.R. 93 passed the Senate by unanimous consent on August 3, 
2001, and was signed by the President on August 20, 2001.

S. 803/H.R. 2458--The E-Government Act (Public Law 107-347)

    The E-Government Act of 2002 seeks to improve the 
organization and delivery of information and services over the 
Internet, and establishes a new IT management framework to 
transform the way government operates. Senator Lieberman (then 
the Ranking Minority Member) introduced the E-Government Act on 
May 1, 2001, with 11 original co-sponsors from both parties. At 
a Committee hearing held on July 11, 2001, OMB Deputy Sean 
O'Keefe testified in support of e-government, and promised to 
work with the Committee to arrive at consensus legislation. On 
March 21, 2002, the Committee unanimously ordered by voice vote 
the bill reported with an amendment in the nature of a 
substitute. The bill was reported to the Senate on June 24, 
2002 (S. Rept. 107-174), and it passed the Senate by unanimous 
consent, with an amendment to the Committee's substitute, on 
June 27, 2002. In September, the House Government Reform 
Committee began to consider the legislation. An agreement, 
adding several new provisions, was reached between the House 
and Senate Committees before final passage. The revised 
legislation passed both the House and Senate, by unanimous 
consent, as H.R. 2458 on November 15, 2002. The President 
signed the legislation on December 17, 2002.
    The Act will, among other things, create an Office of 
Electronic Government, headed by a Presidentially-appointed 
Administrator, to provide focused, top level-leadership on e-
government and information technology issues. The Administrator 
will allocate money from a substantial E-Government Fund to 
support interagency projects and other innovative programs. The 
Act requires that information and services on the Internet be 
organized according to citizens' needs, rather than agency 
jurisdiction, and accessible from a single point, or portal. 
Several provisions require that government information be 
better organized and made more easily searchable. Sweeping new 
privacy protections will require government officials to 
consider the privacy ramifications when developing IT systems 
or beginning information collections. The Act also addresses an 
impending shortage of skilled information technology 
professionals in the Federal workforce; requires agencies to 
conduct their rule-making online; and directs courts to post 
their judicial opinions and other court information. Finally, 
the Act reauthorizes and makes permanent the information 
security provisions originally authored by Senators Thompson 
and Lieberman in the 106th Congress; the information security 
provisions appearing in the final bill were expanded upon with 
the addition of House legislation, the Federal Information 
Security Management Act.

S. 1198--A Bill to Reauthorize Franchise Fund Pilot Programs (Public 
        Law 107-67)

    This bill provides a one year extension of the October 2001 
sunset date for the franchise fund pilot program. Under this 
pilot program, created in 1994, six agencies can create 
franchise funds, which are fully self-supporting business-like 
entities staffed by Federal employees that compete to provide 
common administrative services such as financial and 
administrative systems operations. Chairman Lieberman and 
Ranking Member Thompson introduced this bill on July 19, 2001. 
The Committee ordered it to be reported out of Committee by 
voice vote on August 2, 2001, and it was reported to the Senate 
the same day without a written report. On August 3, 2001, the 
bill passed the Senate by unanimous consent. At the request of 
the Administration, a similar provision was included in the 
Treasury and General Government Appropriations Act for fiscal 
year 2002. The House passed the appropriations bill on October 
31, the Senate passed it by unanimous consent on November 1, 
and the President signed it into law on November 12, 2001.

S. 1202--Authorization of Appropriations for the Office of Government 
        Ethics (Public Law 107-119)

    This legislation extends the authorization of 
appropriations for the Office of Government Ethics (OGE) for 5 
years, through the 2006 fiscal year. OGE was established by the 
Ethics in Government Act of 1978 to help foster high ethical 
standards for employees in the Executive Branch. OGE's 
authorization for appropriations lapsed after September 30, 
2000, and, although both the Senate and the House passed 
reauthorization bills in November of that year, neither bill 
was enacted.
    S. 1202 was introduced by Chairman Lieberman and Ranking 
Minority Member Thompson on July 19, 2001, and was referred to 
the Committee. The bill was ordered favorably reported by voice 
vote on August 2, 2001, was reported with a written report on 
October 30, 2001 (S. Rept. 107-88), and passed the Senate by 
unanimous consent on November 15, 2001. The bill then passed 
the House of Representatives by voice vote under suspension of 
the rules on December 20, 2001, and was signed by the President 
on January 15, 2002.

S. 1256--To Provide for the Reauthorization of the Breast Cancer 
        Research Special Postage Stamp (Public Law 107-67)

    This bill extends the sales period of the breast cancer 
research postage stamp for an additional 6 years beyond its 
scheduled sunset date of July 2002. The breast cancer research 
stamp was the first so-called ``semi-postal'' stamp issued by 
the Postal Service; it is priced to raise money for breast 
cancer research in addition to covering the cost of first class 
postage. As of March 2002, the stamp had raised more than $23 
million for research.
    The bill was introduced by Senator Feinstein on July 26, 
2001 and had 86 co-sponsors. It was referred to the Committee 
and was subsequently referred to the Subcommittee on 
International Security, Proliferation, and Federal Services on 
September 10, 2001. A revised version of the legislation was 
added to the Treasury and General Government Appropriations Act 
for fiscal year 2002, which extended the sales period for the 
stamp until December 31, 2003. It was signed into law by the 
President on November 12, 2001.

S. 1271/H.R. 327--Small Business Paperwork Relief Act (Public Law 107-
        198)

    The purpose of this legislation is to facilitate compliance 
by small business entities with Federal paperwork requirements 
and to establish a task force to examine information collection 
and dissemination. The legislation aids small businesses in 
understanding and complying with Federal information-collection 
requirements, mandates a study of how to streamline 
information-collection requirements for small businesses and 
how to strengthen the dissemination of information by the 
Federal Government, and directs that certain data be compiled 
about enforcement activities involving small entities.
    S. 1271 was introduced by Senators Voinovich, Lincoln, and 
Leahy on July 30, 2001, eventually garnering 15 co-sponsors. On 
November 14, 2001, the Committee agreed to an amendment in the 
nature of a substitute developed by Senator Voinovich in 
consultation with Chairman Lieberman, and ordered it favorably 
reported. The bill was reported by the Committee on November 
27, 2001, and passed the Senate by unanimous consent on 
December 17, 2001. (A written report, S. Rept. 107-153, was 
filed May 21, 2002.)
    H.R. 327, a bill similar to S. 1271, had previously been 
introduced in the House of Representatives on January 31, 2001, 
passed the House on March 15, 2001, and was referred to the 
Committee. Following Senate passage of S. 1271, Chairman 
Lieberman and Senator Voinovich worked with the sponsors of 
H.R. 327 and other interested Representatives to develop 
consensus legislation, in the form of an amendment in the 
nature of a substitute to H.R. 327. On May 22, 2002, by 
unanimous consent, H.R. 327 was discharged from the Committee, 
the consensus substitute amendment was agreed to, and the 
substitute legislation was passed. The House agreed to the 
substitute by unanimous consent on June 18, 2002, and the 
President signed the bill June 28, 2002.

S. 1286/H.R. 2590--Child Care Affordability for Federal Employees 
        (Public Law 107-67)

    Legislation establishing permanent authority for a child-
care benefit for Federal employees was introduced in the 
Committee, and was later incorporated and enacted as part of 
the Treasury, Postal and General Government Appropriations Act 
for fiscal year 2002 (H.R. 2590). This measure makes permanent 
a pilot program first authorized by Congress in 1999 that 
allows agencies to use appropriated funds to provide childcare 
for their employees, for the purpose of making childcare more 
affordable for lower-income employees. The program strengthens 
the Federal Government's ability to attract and retain quality 
employees.
    S. 1286 was introduced by Senator Carnahan on August 1, 
2001, and garnered 13 co-sponsors. The bill was referred to the 
Committee and on September 10, 2001 was further referred to the 
Subcommittee on International Security, Proliferation and 
Federal Services. The measure was incorporated by the Committee 
on Appropriations into S. 1398, the Treasury and General 
Government Appropriations Act for fiscal year 2002, which was 
reported on September 4, 2001, incorporated by the Senate into 
the corresponding House appropriations bill, H.R. 2590, and 
passed on September 19, 2001. The conference report on H.R. 
2590, in which the child-care measure was retained (as 
Sec. 630), passed the House and Senate and, on November 12, 
2001, was signed by the President.

S. 1498/S. 1438--Extending Frequent Flyer Benefits to Military 
        Personnel and Civilian Employees (Public Law 107-107)

    Legislation extending frequent flyer benefits to Federal 
military personnel and civilian employees was introduced and 
ordered reported by the Committee, and was then incorporated 
and enacted as part of the Defense Authorization Act for fiscal 
year 2002 (S 1438; Public Law 107-107 Sec. 1116). This 
legislation allows Federal personnel to make use of promotional 
benefits, such as frequent flyer miles, that they receive as a 
result of official government travel. The measure corrects an 
inequity that exists between government and private sector 
employees for work-related travel and should serve to boost 
employee morale and enhance Federal recruitment and retention. 
The military departments, other Executive Branch agencies, the 
Judicial Branch, and the congressional instrumentalities are 
covered.
    S. 1498 was introduced by Chairman Lieberman on October 3, 
2001, and co-sponsored by Senators Thompson, Akaka, Warner, and 
Voinovich. The bill was referred to the Committee and further 
referred on October 4, 2001 to the Subcommittee on 
International Security, Proliferation and Federal Services. The 
bill was polled out by the Subcommittee and, on November 14, 
2001, the Committee ordered the bill reported favorably by 
voice vote.
    Previously, on September 7, 2001, the Senate Armed Services 
Committee had ordered reported the National Defense 
Authorization Act for Fiscal Year 2002, S. 1416, including a 
limited version of the frequent flyer measure that had been 
offered by Senators Lieberman and Warner in their capacities, 
respectively, as a Member and the Ranking Member of that 
Committee. A later version of the defense authorization 
legislation, including the limited frequent flyer measure, was 
introduced as S. 1438 on September 19, 2001, and passed the 
Senate on October 2, 2001. After the Governmental Affairs 
Committee's favorable action on S. 1498, the conferees 
considering S. 1438 incorporated the full text of S. 1498 into 
the conference report, which was filed on December 12, 2001 (H. 
Rept. 107-333), passed the House and Senate on December 13, 
2002 (when Chairman Lieberman placed a section-by-section 
description of the frequent-flyer measure into the 
Congressional Record, printed at pages S 13137-S 13138), and 
was signed by the President on December 28, 2001.

S. 1713--Rural Service Improvement Act of 2002 (Public Law 107-206)

    This legislation was introduced by Senator Stevens on 
November 15, 2001 to improve and reduce the costs to the United 
States Postal Service of the Alaska bypass mail program. This 
program uses a system of contract aircraft to deliver mail and 
supplies to remote areas of Alaska. On May 22, 2002, S. 1713 
was ordered to be reported out of the Committee by voice vote, 
with an amendment in the nature of a substitute. Its provisions 
were included as Sec. 3002 of the supplemental appropriations 
bill for Fiscal Year 2002, which was signed into law by the 
President on August 2, 2002.

S. 1780/H.R. 5005--Federal Emergency Procurement Flexibility Act of 
        2001 (Public Law 107-296)

    Ranking Minority Member Thompson introduced this 
legislation on December 6, 2001, to provide increased 
flexibility government-wide for the procurement of property and 
services that might facilitate the defense against terrorism. 
The bill provides a 2-year authorization of streamlined 
acquisition authorities and procedures for certain purchases 
and contracts related to humanitarian operations and defenses 
against terrorism or a nuclear, biological, chemical or 
radiological attack. Related legislation--without the 2-year 
limitation--was later included in the Homeland Security Act, 
H.R. 5005 (at Sec. Sec. 851-858), which was signed into law on 
November 25, 2002.

S. 1822/H.R. 3340--Allowing Catch-up Contributions to the Thrift 
        Savings Plan by Participants Age 50 and Over (Public Law 107-
        304)

    This legislation allows Federal employees who participate 
in the Thrift Savings Plan (TSP) and are over 50 years old to 
take advantage of ``catch-up'' contributions, allowing the 
Federal Government's tax-deferred plan to do what private 
sector plans may already choose to do. An earlier change in the 
tax code applied to both private and public tax qualified 
plans, including the TSP, but this program could not be 
initiated for the TSP until the implementing amendments in this 
legislation were enacted.
    S. 1822 was introduced by Senator Akaka on December 13, 
2001, and was referred to the Committee and further referred to 
the Subcommittee on International Security, Proliferation and 
Federal Services. The bill was polled out of the Subcommittee 
and, on March 21, 2002, was ordered reported by the Committee 
by voice vote. In the House of Representatives, the measure was 
introduced on November 19, 2001, as H.R. 3340 and, with two 
unrelated measures added to the bill, was passed by the House 
on October 7, 2002. The Senate passed H.R. 3340 by unanimous 
consent on November 13, 2002, and the President signed the bill 
on November 27, 2002.

S. 1867/H.R. 4628--To Establish the National Commission on Terrorist 
        Attacks Upon the United States (Public Law 107-306)

    This bill establishes a blue-ribbon independent commission 
to investigate the facts and circumstances of the terrorist 
attacks of September 11, 2001, and to report its findings and 
recommendations to the President and Congress.
    Chairman Lieberman introduced S. 1867, with Senator McCain 
as chief co-sponsor on December 20, 2001. The Commission's 
scope will extend to all relevant areas, including intelligence 
agencies, law enforcement agencies, diplomacy, immigration, the 
flow of assets to terrorist organizations, commercial aviation, 
and other areas of the public and private sectors. The 
Commission has subpoena power, and is directed to report its 
findings within 18 months.
    On March 21, 2002, by unanimous voice vote, the Committee 
ordered the bill reported with an amendment in the nature of a 
substitute; the bill was reported on May 14, 2002 (S. Rept. 
107-150). On September 24, 2002, the Senate adopted a slightly 
modified version of the commission legislation as an amendment 
to Homeland Security legislation, H.R. 5005, by a vote of 90-8. 
The commission language was later removed from the final 
version of the Homeland Security Act. On November 15, 2002, the 
House and Senate adopted a modified version of S. 1867 as an 
addition to the conference report of the Intelligence 
Authorization Act of 2002, H.R. 4628 (Title VI). The Act was 
signed into law on November 27, 2002.

S. 2452/H.R. 5005--To Establish the Department of Homeland Security 
        (Public Law 107-296)

    This landmark legislation fundamentally reorganized the 
Federal Government for the 21st Century to meet the threat of 
terrorism and other threats to our homeland security. With an 
organizational structure based largely on legislation 
introduced and developed first by Chairman Lieberman, the 
Homeland Security Act of 2002 (HSA) represents the most 
significant reorganization of our Nation's government in a half 
century. It has combined key agencies with responsibilities for 
homeland security into a single agency, that is led by a 
Senate-confirmed Secretary. It focuses leadership and resources 
on key areas for securing our homeland by creating directorates 
within the Department for: (1) information analysis and 
infrastructure protection, (2) border and transportation 
security, (3) emergency preparedness and response, and (4) 
science and technology. Some 170,000 employees will work for 
the new Department.
    The HSA is the result of over a year of deliberations begun 
on October 11, 2001, when Chairman Lieberman introduced 
legislation (S. 1534) with Senator Specter to create a 
Department of Homeland Security. After the Committee held 
hearings to examine ways to improve the government's 
organization to protect our homeland, S. 1534 was combined with 
legislation by Senator Graham, creating a White House Office 
for Combating Terrorism, and became S. 2452, which was ordered 
reported by the Committee with amendments on May 22, 2002. The 
bill was reported to the Senate on June 24, 2002 (S. Rept. 107-
175). Before the Senate had a chance to consider that bill, 
however, the President dropped his opposition to the 
legislation and announced his support for a Department of 
Homeland Security and released his own proposed legislation to 
create such a Department.
    The Committee held further hearings to consider the 
Administration's proposals, and Senator Lieberman prepared an 
amendment to S. 2452 that was considered, and approved, at a 
July 24-25 business meeting of the Committee. That expanded 
version of S. 2452 went a considerable way to incorporate 
important elements of the Administration's organizational 
proposals as well as key proposals from Committee members, 
including ground-breaking consensus provisions on civil service 
reform prepared by Senators Voinovich and Akaka. The Committee 
bill did not include the Administration's broad provisions to 
rewrite personnel rules, remove assurances that collective 
bargaining rights would not be taken away from employees of the 
new Department, and turn over broad authority to the Executive 
Branch in a number of areas, including appropriations and 
reorganizations.
    In late July, the House of Representatives passed its 
version of the Homeland Security Department bill, H.R. 5005. 
This House bill became the base bill for floor consideration in 
the Senate, and on September 4, 2002, the amended version of S. 
2452 was offered on the Senate floor as S. Amdt. 4471 to H.R. 
5005. Debate on H.R. 5005 continued in the Senate through 
September and October of 2002. A significant portion of the 
debate focused on whether the Administration would be granted 
broad new authorities to rewrite rules of collective bargaining 
and civil service protections. A number of cloture motions were 
unsuccessful. On November 13, 2002, the House passed another 
version of the legislation (H.R. 5710); the text of H.R. 5710 
was subsequently offered in the Senate as a full substitute to 
H.R. 5005. On November 19, 2002, the Senate passed the 
legislation by a vote of 90-9. The House agreed to the Senate 
amendment by unanimous consent on November 22, 2002. President 
Bush signed the Department of Homeland Security Act of 2002 
(H.R. 5005; Public Law 107-296) into law on November 25, 2002. 
As enacted, H.R. 5005 is very similar in its organizational 
components to the legislation that was approved by the Senate 
Governmental Affairs Committee. However, the legislation 
differed from the Committee-approved bill in some significant 
respects, including the authority granted to the Secretary to 
alter civil service procedures and remedies and collective 
bargaining rights of employees of the new Department.

S. 2527/H.R. 3340--Providing Coverage under the Federal Employees 
        Health Benefit Plan for Employees of the Oversees Private 
        Investment Corporation, Now Under a Separate Plan (Public Law 
        107-304)

    This legislation, introduced at the request of the Overseas 
Private Investment Corporation (OPIC), allows OPIC to terminate 
its separate employee health insurance plan by transferring 
about 40 employees and retirees from the plan to the 
government-wide Federal Employees Health Benefit Program 
administered by the Office of Personnel Management. Due to 
rising healthcare costs and other factors, it had become 
inefficient and impractical for OPIC to continue offering a 
separate employee health plan.
    S. 2527 was introduced by Senator Akaka and Senator 
Cochran, on May 16, 2002, and was referred to the Committee and 
further referred to the Subcommittee on International Security, 
Proliferation and Federal Services. After being polled out by 
the Subcommittee, S. 2527 was ordered reported by the Committee 
on October 9, 2002 by a roll call vote of 9-0, was reported on 
October 15, 2002 without written report, and passed the Senate 
by unanimous consent on October 17, 2002. The same legislation 
had been added to H.R. 3340 (as Sec. 4) as it passed the House 
of Representatives on October 7, 2002. The Senate passed H.R. 
3340 by unanimous consent on November 13, 2002, and the 
President signed the bill on November 27, 2002.

S. 2530/H.R. 5005--Provides Law Enforcement Powers for Inspector 
        General Agents (Public Law 107-296)

    Legislation to provide law enforcement powers to Inspector 
General agents was reported by the Committee and passed by the 
Senate as a separate bill, and was then incorporated by the 
Committee and enacted as part of the Homeland Security Act. 
This legislation provides specific statutory authority for the 
Attorney General to grant certain law enforcement powers to 
presidentially-appointed Federal Inspectors General and their 
investigative personnel. Criminal investigators for the Offices 
of Inspector General (OIGs) have been exercising law 
enforcement authorities for many years under designations as 
Special Deputy U.S. Marshals. Since 1995, virtually all 
criminal investigators in OIGs have exercised law enforcement 
authorities under office-wide deputations, which are renewed 
biannually. However, this arrangement was burdensome on the 
U.S. Marshals Service, lacked sufficient oversight of the use 
of law enforcement authority by IGs, and risked a lapse in 
authority at the time of renewal. The purpose of the new 
legislation is to relieve the administrative burdens, provide 
additional oversight, and ensure that criminal investigations 
are not interrupted by lapses in the current deputation 
process.
    S. 2530 was introduced by Ranking Minority Member Thompson 
and Chairman Lieberman on May 16, 2002, and referred to the 
Committee. The Committee ordered the bill reported by voice 
vote on May 22, 2002, and the bill was reported with a written 
report on June 25, 2002 (S. Rept. 107-176). The Chairman then 
incorporated this legislation into his revised version of the 
Homeland Security Act, S. 2452, which the Committee endorsed, 
with amendments, on July 25, 2002. On October 17, 2002, S. 2530 
passed the Senate by unanimous consent, with an amendment. The 
Committee's IG measure was ultimately incorporated into the 
final version of H.R. 5005 (Sec. 812), which passed the Senate 
on November 19, 2002, passed the House on November 22, 2002, 
and was signed by the President on November 25, 2002.

S. 2644/H.R. 4685--Accountability of Tax Dollars Act of 2002 (Public 
        Law 107-289)

    S. 2644 was introduced by Senator Fitzgerald on June 19, 
2002 to expand the types of Federal agencies that are required 
to prepare audited financial statements each year, beginning in 
March 2003. Prior to the introduction of this bill, only the 24 
major departments and agencies were required by law to do so, 
although several independent agencies such as the Federal 
Communications Commission and the Federal Trade Commission were 
doing so voluntarily. The bill was ordered to be reported out 
by the Committee on October 9, 2002 by a roll call vote of 9-0, 
with a substitute amendment offered by Senator Fitzgerald that 
conformed its provisions to those of H.R. 4685 as passed by the 
House. The bill was reported on October 16, 2002, and a written 
report was filed on November 4, 2002 (S. Rept. 107-331). The 
Senate passed H.R. 4685 by unanimous consent on October 17, 
2002, and that legislation was signed into law by the President 
on November 7, 2002.

S. 2651/H.R. 5005--Federal Workforce Improvement Provisions (Public Law 
        107-296)

    A number of measures to improve management of the Federal 
workforce government-wide were considered by the Committee as 
part of a stand-alone bill, and were then incorporated by the 
Committee and enacted as part of the Homeland Security Act. 
These measures include provisions: to require that each agency 
have a Chief Human Capital Officer to assist in managing a 
high-quality workforce, to loosen some of the civil service 
rules governing the hiring of employees, and to increase 
authority to grant voluntary separation incentive pay and 
voluntary early retirement as tools for shaping the workforce.
    S. 2651, the Federal Workforce Improvement Act of 2002, was 
introduced by Senator Voinovich on June 20, 2002, and was 
referred to the Committee and further referred to the 
Subcommittee on International Security, Proliferation and 
Federal Services (ISPFS). This bill built on provisions of S. 
1603, which Senator Voinovich had introduced on October 31, 
2001.
    Senators Voinovich and Akaka reached agreement on several 
measures from S. 2651, and offered them during the Committee's 
consideration of the Chairman's amendment in the nature of a 
substitute to S. 2452, the Homeland Security Act. The Committee 
agreed by voice vote to the Voinovich/Akaka amendment, and, on 
July 25, 2002, voted to endorse the Chairman's substitute, with 
amendments. These Federal workforce provisions were ultimately 
incorporated into the final version of H.R. 5005 (Title XIII), 
which passed the Senate on November 19, 2002, passed the House 
on November 22, 2002, and was signed by the President on 
November 25, 2002.

S. 3044--Court Services and Offender Supervision Agency Interstate 
        Supervision Act of 2002 (Public Law No. 107-302)

    The bill makes clear that the Court Services and Offender 
Supervision Agency of the District of Columbia (CSOSA) is 
responsible for arranging for the supervision of District of 
Columbia parolees, probationers, and released offenders who 
seek to move out of the District of Columbia, and also for 
supervising parolees, probationers, and released offenders from 
other States and U.S. territories who seek to move to the 
District of Columbia. In addition, in order for the agency to 
meet these interstate obligations, the bill authorizes CSOSA to 
enter into an Interstate Compact for Adult Offender Supervision 
or other agreements with other States and U.S. territories. S. 
3044 was introduced by Senator Durbin on October 3, 2002, and 
was ordered to be reported without amendment by the Committee 
on October 9, 2002 by a roll call vote of 9-0. The bill was 
reported to the Senate on October 15, 2002, and a written 
report was filed on November 4, 2002 (S. Rept. 107-332). The 
Senate passed the bill by unanimous consent on November 13, 
2002, and the bill was passed by the House of Representatives 
on November 15, 2002. The President signed S. 3044 into law on 
November 26, 2002.

S. 3070/H.R. 3340--Reauthorizing Appropriations for the Merit Systems 
        Protection Board and the Office of Special Counsel (Public Law 
        No. 107-304)

    The Merit Systems Protection Board (MSPB) and the Office of 
Special Counsel (OSC) administer programs and procedures to 
safeguard the Federal Government's merit-based system of 
employment and protect Federal employees against improper 
personnel practices, particularly those Federal employees who 
step forward to disclose government waste, fraud, and abuse. 
The authorization for appropriations for MSPB expired in 2002 
and for OSC expired in 1997; this legislation extends the 
authorizations through the end of the 2007 fiscal year.
    S. 3070 was introduced by Senators Akaka and Levin on 
October 8, 2002, and was referred to the Committee. In addition 
to the reauthorization provisions, this bill contained a number 
of measures to clarify and strengthen the protection of 
whistleblowers against reprisal, building on provisions 
introduced by these and other Senators in S. 2829 and S. 995. 
S. 3070 also removes the requirement for OSC to return all 
documents to the whistleblower in all disclosure cases that are 
closed without referral to an agency head. The bill was ordered 
reported by the Committee on October 9, 2002 by a roll call 
vote of 9-0, and was reported with a written report (S. Rept. 
107-349) on November 19, 2002. The same provisions 
reauthorizing the MSPB and OSC for 5 years and relieving OSC of 
the requirement to return documents (but not the additional 
whistleblower provisions) had been added to H.R. 3340 (at 
Sec. Sec. 2-3) as it passed the House of Representatives on 
October 7, 2002. The Senate passed H.R. 3340 by unanimous 
consent on November 13, 2002, and the President signed the bill 
on November 27, 2002.

H.R. 169/S. 201--Notification and Federal Employee Antidiscrimination 
        and Retaliation Act of 2002 (Public Law 107-174)

    This bill seeks to hold Federal agencies financially 
accountable for violations of discrimination and whistleblower 
protection laws. The Act requires Federal agencies to reimburse 
the Treasury for settlements and judgments paid to employees as 
a result of antidiscrimination and whistleblower protection 
complaints. Prior to the enactment of this law, agencies paid 
these costs when complaints were resolved administratively, but 
not when monetary relief (whether by settlement or judicial 
judgment) followed the filing of a lawsuit. In such cases, the 
costs were generally paid by the Judgment Fund, a permanently 
authorized fund administered by the Treasury.
    H.R. 169 was introduced on January 3, 2001 by 
Representative James Sensenbrenner. On October 2, 2001, the 
House unanimously passed the legislation and on October 3, 
2001, H.R. 169 was referred to the Committee. Similar 
legislation, the Federal Employees Protection Act of 2001, was 
introduced on January 29, 2001 by Senator John Warner as S. 201 
and was referred to the Committee. The Subcommittee on 
International Security, Proliferation, and Federal Services 
considered both bills and polled out H.R. 169 and S. 201 on 
March 19, 2002. On March 21, 2002, the Committee ordered 
reported by voice vote H.R. 169 with amendments. On April 15, 
2002, the Committee ordered the bill reported to the Senate (S. 
Rept. 107-143). The bill was adopted by the Senate, with 
additional amendments, by unanimous consent on April 23, 2002. 
The House passed the bill under suspension of the rules on 
April 30, 2002; it was signed into law by the President on May 
15, 2002.

H.R. 1042--To Prevent the Elimination of Certain Reports (Public Law 
        107-74)

    This bill prevents the elimination of certain reports 
pursuant to the requirements of the Federal Reports Elimination 
and Sunset Act of 1995. That law eliminated or modified 
approximately 200 reporting requirements imposed on Federal 
agencies in law and by Congress, and placed a 4-year sunset on 
many other reports. The legislation was designed to reduce 
paperwork burdens, streamline information flows, and save 
taxpayer dollars used to prepare reports that are no longer 
necessary. The bill put the burden on the President and 
Congressional committees to determine which reports they 
believed were necessary and which were not--and it gave them 4 
years to do it.
    The House Science Committee subsequently determined that 29 
reports relevant to its oversight responsibilities, which would 
be eliminated pursuant to the sunset provisions of Federal 
Reports Elimination and Sunset Act of 1995, were still 
necessary. H.R. 1042 exempts these and other reports from 
elimination.
    H.R. 1042 was introduced in the House of Representatives by 
Representative Felix Grucci on March 15, 2001. On March 21, 
2001, the House passed the legislation under suspension of the 
rules. On March 22, 2001, the legislation was referred in the 
Senate to the Committee. On August 2, 2001, the Committee 
ordered the bill by voice vote to be reported without 
amendment; the bill was reported to the Senate on October 31, 
2001 (S. Rept. 107-90). On November 15, 2001, H.R. 1042 was 
passed by the Senate without amendment by unanimous consent. 
The legislation was signed into law on November 28, 2001.

H.R. 1499--District of Columbia College Access Improvement Act of 2002 
        (Public Law 107-157)

    This bill expands the District of Columbia Tuition 
Assistance Grant program to provide grants to eligible District 
residents to attend Historically Black Colleges nationwide, and 
to make eligible those District residents meeting certain 
specified criteria who graduated high school in or after 1998 
or who were attending eligible institutions at the time of 
enactment of H.R. 1499, no matter when they graduated high 
school. H.R. 1499 was introduced in the House of 
Representatives on April 4, 2001 by Representative Eleanor 
Holmes Norton. It passed the House under suspension of the 
rules on July 30, 2001. The Committee ordered H.R. 1499 to be 
reported by voice vote with an amendment in the nature of a 
substitute on November 14, 2001; the bill was reported on 
November 29, 2001 (S. Rept. 107-101). The bill, as amended, 
passed the Senate on December 12, 2001 by unanimous consent, 
and passed the House of Representatives with further amendments 
on March 12, 2002. The Senate cleared the final version of the 
legislation on March 14, 2002 by unanimous consent and the 
President signed H.R. 1499 into law on April 4, 2002.

H.R. 2061--To Amend the Charter of Southeastern University of the 
        District of Columbia (Public Law 107-93)

    H.R. 2061 lifts the requirement in the charter of 
Southeastern University, which was incorporated by an act of 
Congress in 1937, that one third of its Board of Trustees 
consist of alumni. H.R. 2061 was introduced in the House on 
June 5, 2001 by Representative Eleanor Holmes Norton. It passed 
the House under suspension of the rules on September 20, 2001. 
The Committee ordered H.R. 2061 be reported without amendment 
on November 14, 2001, by voice vote; the bill was reported on 
November 29, 2001 (S. Rept. 107-102), and it passed the Senate 
by unanimous consent on December 6, 2001. The President signed 
the bill into law on December 21, 2001.

H.R. 2199--District of Columbia Police Coordination Amendment Act of 
        2001 (Public Law 107-113)

    This bill corrects a drafting error in Section 11712(d) of 
the National Capital Revitalization and Self-Government 
Improvement Act of 1997 (D.C. Code, Sec. 4-192(d), recodified 
at D.C. Code, Sec. 5-133.17), in order to permit all Federal 
enforcement agencies in the District of Columbia to enter into 
cooperative agreements with the Metropolitan Police Department 
to further crime prevention and law enforcement in Washington, 
D.C. The 1997 Act contained a list of enforcement agencies that 
omitted mention of one.
    H.R. 2199 was introduced in the House on June 14, 2001 by 
Representative Eleanor Holmes Norton. On September 25, 2001, 
the House passed the bill under suspension of the rules. The 
Committee ordered H.R. 2199 reported without amendment on 
November 14, 2001, by voice vote; the bill was reported on 
November 29, 2001 (S. Rept. 107-103). The bill and a technical 
amendment were passed by the Senate by unanimous consent on 
December 11, 2001, and the bill, as amended, passed the House 
of Representatives under suspension of the rules on December 
19, 2001. H.R. 2199 was signed into law by the President on 
January 8, 2002.

H.R. 2305--Criminal Justice Coordinating Council Restructuring Act of 
        2001 (Public Law 107-180)

    This bill authorizes the heads of six Federal agencies, 
specifically, the Court Services and Offender Supervision 
Agency for the District of Columbia, the District of Columbia 
Pretrial Services Agency, the United States Attorney for the 
District of Columbia, the Federal Bureau of Prisons, the United 
States Parole Commission, and the United States Marshals 
Service, to meet regularly with District law enforcement 
officials as the ``Criminal Justice Coordinating Council.'' 
H.R. 2305 authorizes Federal participation and funds for the 
Council, and requires it to submit to the President, Congress, 
and appropriate Federal and local agencies an annual report 
detailing its activities. H.R. 2305 was introduced by 
Representative Constance Morella on June 25, 2001, and was 
passed by the House of Representatives under suspension of the 
rules on December 4, 2001. The Committee ordered H.R. 2305 
reported without amendment on March 21, 2002, by voice vote; 
the bill was reported on April 29, 2002 (S. Rept. 107-145), and 
the Senate passed the bill by unanimous consent on May 7, 2002. 
The President signed H.R. 2305 into law on May 20, 2002.

H.R. 2336--Reauthorizing the Judiciary to Redact Judges' Financial 
        Disclosure Statements (Public Law 107-126)

    A 1998 amendment to the Ethics in Government Act authorized 
the Judicial Conference to redact a judge's financial 
disclosure statement to prevent the release of information that 
could endanger the judge, subject to a 3-year sunset expiring 
on December 31, 2001. H.R. 2336, as introduced, would have 
removed the sunset and made the authority permanent. In 
response to concerns expressed by Members of the Committee and 
other Senators about the redaction authority and the 
judiciary's implementation of it, the bill was amended before 
passage by the Senate to extend the sunset for 4 years, rather 
than making redaction authority permanent.
    The bill was introduced in the House of Representatives on 
June 27, 2001, and was passed on a motion to suspend the rules 
on October 16, 2001. The bill was received in the Senate and 
referred to the Committee. The Committee ordered the bill 
reported without amendment on November 14, 2001 by voice vote, 
and reported the bill with a written report (S. Rept. 107-111) 
on December 7, 2001. The Senate passed the bill by unanimous 
consent, with an amendment, on December 11, 2001. The House 
passed the bill, as amended by the Senate, under suspension of 
the rules on December 20, 2001, and the President signed the 
bill on January 16, 2002.

H.R. 2559--Amendments to the Long-Term Care Insurance Program (Public 
        Law 107-104)

    In the 106th Congress, the Committee reported out 
legislation that became law, the Long-Term Care Security Act, 
establishing a program under which qualified Federal personnel 
and retirees receiving an annuity could purchase long-term care 
insurance from one or more private insurance carriers. H.R. 
2559 amends the Act to--(1) exempt premiums under the program 
from State and local taxes, making the Act more consistent with 
other insurance programs for Federal employees and making the 
program more affordable to potential enrollees, and (2) expand 
coverage to include retired Federal employees who are not yet 
receiving an annuity but who are entitled to a deferred 
annuity.
    H.R. 2559 was introduced in the House of Representatives on 
July 18, 2001, and passed the House under suspension of the 
rules on October 30, 2001. The bill was received in the Senate, 
was referred to the Committee, and was further referred to the 
Subcommittee on International Security, Proliferation and 
Federal Services. The bill was polled out of the Subcommittee, 
was ordered reported by the Committee on November 14, 2001, by 
voice vote, and was reported on November 27, 2001. A written 
report (S. Rept. 107-128) was filed on December 18, 2001. The 
bill passed the Senate by unanimous consent on December 17, 
2001, and the President signed the bill on December 27, 2001.

H.R. 2657/S. 1382--District of Columbia Family Court Act of 2001 
        (Public Law No. 107-108)

    This bill redesignates the Family Division of the Superior 
Court of the District of Columbia as the Family Court of the 
Superior Court, and makes structural changes in the Court in an 
effort to promote recruitment and retention of judges trained 
and experienced in family law, and to provide consistency and 
efficiency in the assignment of judges. In order to ensure that 
all families receive the benefits of this expert court, the 
bill requires that all family cases be heard by the court, with 
all those pending at the time of enactment to be transferred to 
the dockets of judges or magistrates sitting on the Family 
Court bench. To enhance consistency and expertise of the court, 
the bill requires that Family Court judges serve 5 year terms. 
The bill also treats hearing commissioners, who have 
significant expertise in family law, as magistrates to give 
them additional power to move cases. In addition, in order to 
help dispose of the thousands of abuse and neglect cases 
pending before the court, the bill authorizes the hiring of 
additional magistrates and the appointment of a special master. 
Finally, the bill requires the court to have on-site a social 
services liaison and to establish an electronic case management 
and tracking system to be integrated with the systems of D.C. 
agencies providing social services to children and families.
    H.R. 2657 was introduced by Representative Tom DeLay on 
July 26, 2001. A related bill, S. 1382, was introduced on 
August 3, 2001, by Senator DeWine, with Senator Landrieu 
cosponsoring. The House of Representatives passed H.R. 2657 
under suspension of the rules on September 20, 2001; the bill 
was referred to the Committee, and subsequently referred to the 
Subcommittee on Oversight of Government Management, 
Restructuring and the District of Columbia. The Committee 
ordered both H.R. 2657 and S. 1382 be reported with amendments 
in the nature of a substitute on November 14, 2001, by voice 
vote; the bills were reported on December 5, 2001 (S. Rept. 
107-107; S. Rept. 107-108). H.R. 2657 and an amendment were 
passed by the Senate by unanimous consent on December 14, 2001. 
The House of Representatives passed the bill, as amended, under 
suspension of the rules on December 19, 2001. The President 
signed H.R. 2657 into law on January 8, 2002.

H.R. 3925/S. 1913--Digital Tech Corps Act of 2002 (Public Law 107-347)

    Representative Tom Davis introduced this legislation on 
March 12, 2002, based on similar legislation he had introduced 
on July 31, 2001 as H.R. 2678. Senator Voinovich introduced 
companion legislation on February 6, 2002, which was referred 
to the Committee. It was further referred to the Subcommittee 
on International Security, Proliferation, and Federal Services 
on April 24, 2002. The legislation authorized the exchange of 
information technology workers between private sector 
organizations and government agencies, for periods of 6 months 
to 2 years. H.R. 3925 passed the House on April 10, 2002, and 
was referred to the Committee. Similar provisions were included 
in H.R. 2458, the E-Government Act (at Sec. 209(c)), which was 
enacted on December 17, 2002.

H.R. 4878--Improper Payments Reduction Act of 2002 (Public Law 107-300)

    H.R. 4878 requires Federal agencies to identify programs 
that are vulnerable to improper payments and to estimate 
annually the amount of underpayments and overpayments made by 
these programs, whether by the agency or through a contractor 
or other third party administering the program. The bill is 
intended to reduce the billions of dollars in improper payments 
made by Federal agencies each year. Representative Stephen Horn 
introduced the bill on June 6, 2002, and it passed the House on 
July 9, 2002. The bill was ordered to be reported out by the 
Committee on October 9, 2002 by a roll call vote of 9-0 with an 
amendment in the nature of a substitute, and it was reported on 
October 15, 2002. A written report was filed on November 4, 
2002 (S. Rept 107-333). The Senate passed the measure by 
unanimous consent on October 17, 2002, and the House agreed to 
the amended version on November 12, 2002. On November 26, 2002, 
the President signed H.R. 4878 into law.

Postal Naming Bills

    S. 737, a bill to designate the facility of the United 
States Postal Service located at 811 South Main Street in 
Yerington, Nevada, as the ``Joseph E. Dini, Jr. Post Office'' 
(Public Law 107-144).
    S. 970, a bill to designate the facility of the United 
States Postal Service located at 39 Tremont Street, Paris Hill, 
Maine, as the ``Horatio King Post Office Building'' (Public Law 
107-145).
    H.R. 132, a bill to designate the facility of the United 
States Postal Service located at 620 Jacaranda Street in Lanai 
City, Hawaii, as the ``Goro Hokama Post Office Building'' 
(Public Law 107-6).
    H.R. 364, a bill to designate the facility of the United 
States Postal Service located at 5927 Southwest 70th Street in 
Miami, Florida, as the ``Marjory Williams Scrivens Post 
Office'' (Public Law 107-29).
    H.R. 395, a bill to designate the facility of the United 
States Postal Service located at 2305 Minton Road in West 
Melbourne, Florida, as the ``Ronald W. Reagan Post Office of 
West Melbourne, Florida'' (Public Law 107-7).
    H.R. 669, a bill to designate the facility of the United 
States Postal Service located at 127 Social Street in 
Woonsocket, Rhode Island, as the ``Alphonse F. Auclair Post 
Office Building'' (Public Law 107-261).
    H.R. 670, a bill to designate the facility of the United 
States Postal Service located at 7 Commercial Street in 
Newport, Rhode Island, as the ``Bruce F. Cotta Post Office 
Building'' (Public Law 107-262).H.R. 821, a bill to designate 
the facility of the United States Postal Service located at 
1030 South Church Street in Asheboro, North Carolina, as the 
``W. Joe Trogdon Post Office Building'' (Public Law 107-32).
    H.R. 1183/S. 985, a bill to designate the facility of the 
United States Postal Service located at 113 South Main Street 
in Sylvania, Georgia, as the ``G. Elliot Hagan Post Office 
Building'' (Public Law 107-34).
    H.R. 1366/S. 2217, a bill to designate the facility of the 
United States Postal Service located at 3101 West Sunflower 
Avenue in Santa Ana, California, as the ``Hector G. Godinez 
Post Office Building'' (as, Public Law 107-190).
    H.R. 1374, a bill to designate the facility of the United 
States Postal Service located at 600 Calumet Street in Lake 
Linden, Michigan, as the ``Philip E. Ruppe Post Office 
Building'' (Public Law 107-191).
    S. 1906, a bill to designate the facility of the United 
States Postal Service located at 3698 Inner Perimeter Road in 
Valdosta, Georgia, as the ``Major Lyn McIntosh Post Office 
Building'' (Public Law 107-160).
    H.R. 1748, a bill to designate the facility of the United 
States Postal Service located at 805 Glen Burnie Road in 
Richmond, Virginia, as the ``Tom Bliley Post Office Building'' 
(Public Law 107-161).
    H.R. 1749, a bill to designate the facility of the United 
States Postal Service located at 685 Turnberry Road in Newport 
News, Virginia, as the ``Herbert H. Bateman Post Office 
Building'' (Public Law 107-162).
    H.R. 1753, a bill to designate the facility of the United 
States Postal Service located at 419 Rutherford Avenue, N.E., 
in Roanoke, Virginia, as the ``M. Caldwell Butler Post Office 
Building'' (Public Law 107-35)
    H.R. 1761, a bill to designate the facility of the United 
States Postal Service located at 8588 Richmond Highway in 
Alexandria, Virginia, as the ``Herb Harris Post Office 
Building'' (Public Law 107-92).
    H.R. 1766, a bill to designate the facility of the United 
States Postal Service located at 4270 John Marr Drive in 
Annandale, Virginia, as the ``Stan Parris Post Office 
Building'' (Public Law 107-85).
    H.R. 2043/S. 1181, a bill to designate the facility of the 
United States Postal Service located at 2719 South Webster 
Street in Kokomo, Indiana, as the ``Elwood Haynes `Bud' Hillis 
Post Office Building'' (Public Law 107-36).
    H.R. 2261/S. 1184, a bill to designate the facility of the 
United States Postal Service located at 2853 Candler Road in 
Decatur, Georgia, as the ``Earl T. Shinhoster Post Office'' 
(Public Law 107-86).
    H.R. 2454/S. 1381, a bill to redesignate the facility of 
the United States Postal Service located at 5472 Crenshaw 
Boulevard in Los Angeles, California, as the ``Congressman 
Julian C. Dixon Post Office'' (Public Law 107-88).
    H.R. 2577, a bill to designate the facility of the United 
States Postal Service located at 310 South State Street in St. 
Ignace, Michigan, as the ``Bob Davis Post Office Building'' 
(Public Law 107-163).
    H.R. 2876, a bill to designate the facility of the United 
States Postal Service located in Harlem, Montana, as the 
``Francis Bardanouve United States Post Office Building'' 
(Public Law 107-164).
    H.R. 2910, a bill to designate the facility of the United 
States Postal Service located at 3131 South Crater Road in 
Petersburg, Virginia, as the ``Norman Sisisky Post Office 
Building'' (Public Law 107-165).
    H.R. 3034/S. 1222, a bill to redesignate the facility of 
the United States Postal Service located at 89 River Street in 
Hoboken, New Jersey, as the ``Frank Sinatra Post Office 
Building'' (Public Law 107-263).
    H.R. 3072, a bill to designate the facility of the United 
States Postal Service located at 125 Main Street in Forest 
City, North Carolina, as the ``Vernon Tarlton Post Office 
Building'' (Public Law 107-166).
    H.R. 3248, a bill to designate the facility of the United 
States Postal Service located at 65 North Main Street in 
Cranbury, New Jersey, as the ``Todd Beamer Post Office 
Building'' (Public Law 107-129).
    S. 2907, a bill to redesignate the facility of the United 
States Postal Service located at 900 Brentwood Road, NE, in 
Washington, D.C., as the ``Joseph Curseen, Jr. and Thomas 
Morris, Jr. Processing and Distribution Center'' (Public Law 
107-225).
    H.R. 3379, a bill to designate the facility of the United 
States Postal Service located at 375 Carlls Path in Deer Park, 
New York, as the ``Raymond M. Downey Post Office Building'' 
(Public Law 107-167).
    H.R. 3738, a bill to designate the facility of the United 
States Postal Service located at 1299 North 7th Street in 
Philadelphia, Pennsylvania, as the ``Herbert Arlene Post Office 
Building'' (Public Law 107-264).
    H.R. 3739, a bill to designate the facility of the United 
States Postal Service located at 6150 North Broad Street in 
Philadelphia, Pennsylvania, as the ``Rev. Leon Sullivan Post 
Office Building'' (Public Law 107-265).
    H.R. 3740, a bill to designate the facility of the United 
States Postal Service located at 925 Dickinson Street in 
Philadelphia, Pennsylvania, as the ``William A. Cibotti Post 
Office Building'' (Public Law 107-266).
    H.R. 3789/S. 1970, a bill to designate the facility of the 
United States Postal Service located at 2829 Commercial Way in 
Rock Springs, Wyoming, as the ``Teno Roncalio Post Office 
Building'' (Public Law 107-192).
    H.R. 3960, a bill to designate the facility of the United 
States Postal Service located at 3719 Highway 4 in Jay, 
Florida, as the ``Joseph W. Westmoreland Post Office Building'' 
(Public Law 107-193).
    H.R. 4102/S. 2840, a bill to designate the facility of the 
United States Postal Service located at 120 North Maine Street 
in Fallon, Nevada, as the ``Rollan D. Melton Post Office 
Building'' (Public Law 107-267).
     H.R. 4486/S. 2433, a bill to designate the facility of the 
United States Postal Service located at 1590 East Joyce 
Boulevard in Fayetteville, Arkansas, as the ``Clarence B. Craft 
Post Office Building'' (Public Law 107-194).
    H.R. 4717, a bill to designate the facility of the United 
States Postal Service located at 1199 Pasadena Boulevard in 
Pasadena, Texas, as the ``Jim Fonteno Post Office Building'' 
(Public Law 107-268).
    H.R. 4755, a bill to designate the facility of the United 
States Postal Service located at 204 South Broad Street in 
Lancaster, Ohio, as the ``Clarence Miller Post Office 
Building'' (Public Law 107-269).
    H.R. 4794, a bill to designate the facility of the United 
States Postal Service located at 1895 Avenida Del Oro in 
Oceanside, California, as the ``Ronald C. Packard Post Office 
Building'' (Public Law 107-270).
    H.R. 4797/S. 2929, a bill to redesignate the facility of 
the United States Postal Service located at 265 South Western 
Avenue, Los Angeles, California, as the ``Nat King Cole Post 
Office'' (Public Law 107-271).
    H.R. 4851/S. 2828, a bill to redesignate the facility of 
the United States Postal Service located at 6910 South Yorktown 
Avenue in Tulsa, Oklahoma, as the ``Robert Wayne Jenkins 
Station'' (Public Law 107-272).
    S. 2900, a bill to designate the facility of the United 
States Postal Service located at 6101 West Old Shakopee Road in 
Bloomington, Minnesota, as the ``Thomas E. Burnett, Jr. Post 
Office Building'' (Public Law 107-227).
    H.R. 5308, a bill to designate the facility of the United 
States Postal Service located at 301 South Howes Street in Fort 
Collins, Colorado, as the ``Barney Apodaca Post Office'' 
(Public Law 107-283).
    H.R. 5333, a bill to designate the facility of the United 
States Postal Service located at 4 East Central Street in 
Worcester, Massachusetts, as the ``Joseph D. Early Post Office 
Building'' (Public Law 107-284).
    H.R. 5336/S. 2918, a bill to designate the facility of the 
United States Postal Service located at 380 Main Street in 
Farmingdale, New York, as the ``Peter J. Ganci, Jr. Post Office 
Building'' (Public Law 107-285).
    H.R. 5340/S. 2931, a bill to designate the facility of the 
United States Postal Service located at 5805 White Oak Avenue 
in Encino, California, as the ``Francis Dayle `Chick' Hearn 
Post Office'' (Public Law 107-286).
    H.R. 5574, a bill to designate the facility of the United 
States Postal Service located at 206 South Main Street in 
Glennville, Georgia, as the ``Michael Lee Woodcock Post 
Office'' (Public Law 107-291).

   Measures Favorably Reported by Committee and Passed by the Senate


S. Res. 187--Resolution Commending the Capitol Hill Community for Their 
        Courage and Professionalism Following the Release of Anthrax

    This Senate resolution commends the staffs of Members of 
Congress, the Capitol Police, the Office of the Attending 
Physician and his health care staff, and other members of the 
Capitol Hill community for their courage, professionalism, and 
dedication to serving the public in the aftermath of the 
September 11, 2001, attacks and the release of anthrax in 
Senator Daschle's office. The resolution was introduced by 
Senator Cleland on December 5, 2001, and was referred to the 
Committee. The resolution was ordered to be reported on March 
21, 2002 by voice vote; it was reported on April 8, 2002 
without written report; and it was agreed to in the Senate by 
unanimous consent on April 10, 2002.

H. Con. Res. 339--Resolution Expressing the Sense of the Congress 
        Regarding the Bureau of the Census on the 100th Anniversary of 
        its Establishment

    This resolution recognizes the 100th anniversary of the 
establishment of the Bureau of the Census, and acknowledges the 
achievements and contributions of the Bureau of the Census, and 
of its current and former employees, to the United States. The 
resolution was introduced by Representative Dan Miller and was 
agreed to in the House on March 12, 2002, whereupon it was 
received in the Senate and referred to the Committee. The 
resolution was ordered to be reported by the Committee on March 
21, 2002 by voice vote, and it was reported the same day 
without written report. It was agreed to in the Senate on March 
22, 2002.

S. 1144--To Reauthorize the Federal Emergency Management Food and 
        Shelter Program

    This bill would reauthorize funding for the Emergency Food 
and Shelter (EFS) program for Fiscal Years 2002 through 2004. 
The bill authorized increased funding over current levels. The 
EFS program provides emergency assistance to supplement 
community efforts to meet food, shelter, and other related 
needs of homeless and hungry persons in all fifty States and 
the District of Columbia. Most of the money is allocated by 
local boards composed of representatives from religious and 
charitable organizations, which recommend non-profit and local 
government agencies to be funded. The money is spent on food or 
shelter, or on emergency one-month assistance with rent, 
mortgage, and utility payments. Administrative overhead is kept 
to an unusually low amount, less than 3 percent.
    S. 1144 was introduced by Chairman Lieberman on June 29, 
2001, and was co-sponsored by Senators Collins, Levin, Akaka, 
Durbin, and Cleland. The bill was ordered to be reported by the 
Committee on August 2, 2001 by voice vote, was reported the 
same day without written report, and was approved by the Senate 
on August 3, 2001 by unanimous consent.

S. 2936--To Temporarily Increase Annuity Computations During Periods of 
        Receiving Disability Payments

    This legislation would address a longstanding inequity in 
the way Federal employee pensions are determined for employees 
insured on the job who then spend an extended time receiving 
workers' compensation. During the time the employee is 
receiving workers' compensation, no payments are made into the 
employee's Thrift Savings Plan account or into Social Security. 
If the employee returns to work and subsequently retires, the 
employee is then at a distinct disadvantage. Under the bill, to 
correct this situation, an employee who receives workers' 
compensation for at least a year and then returns to work will, 
upon retirement, receive a boost in annuity under the Federal 
Employees Retirement System for the period when the employee 
was receiving the workers' compensation.
    S. 2936 was introduced by Senator Allen on September 13, 
2002, on behalf of himself and Senators Warner and Clinton. The 
bill was referred to the Committee, and further referred to the 
Subcommittee on International Security, Proliferation and 
Federal Services. The bill was polled out by the Subcommittee; 
was ordered reported with an amendment by the Committee by roll 
call vote of 9-0 on October 9, 2002; was reported from the 
Committee on October 15, 2002; and was passed by the Senate by 
unanimous consent on October 17, 2002. The bill was then 
received in the House and referred to the House Committee on 
Government Reform.

Postal Naming Bills

    S. 1983, a bill to designate the facility of the United 
States Postal Service located at 201 Main Street, Lake Placid, 
New York, as the ``John A. `Jack' Shea Post Office Building.''

             Selected Measures Considered by the Committee


S. 1008--The Climate Change Strategy and Technology Innovation Act of 
        2001

    S. 1008 would have created an Office on Climate Change 
within the White House, and would have required the office to 
prepare a detailed strategy to stabilize the concentration of 
greenhouse gasses in the atmosphere. The legislation also 
sought to create a new office within the Department of Energy, 
with new funding, to research and develop technologies to 
combat climate change.
    S. 1008 was introduced on June 8, 2001 by Senators Byrd and 
Stevens, and referred to the Committee. The Committee held a 
hearing on the legislation on July 18, 2001. On August 2, 2001, 
the Committee ordered the bill to be reported, with two 
amendments, by voice vote. The bill was reported on November 
15, 2001 (S. Rept. 107-99). A similar version of the 
legislation passed the Senate as part of omnibus energy 
legislation (S. 517; Title X), but did not become law.

S. 1651--United States Consensus Council Act of 2002

    S. 1651 would create the United States Consensus Council, 
which would be established to provide for a consensus building 
process in addressing national policy issues. Under the 
legislation, which was introduced by Senator Dorgan on November 
7, 2001, the Council, a nonprofit independent entity, would 
provide professional mediation services in cooperation with 
Congress to help resolve difficult policy issues by building 
consensus agreements among stakeholders. On October 9, 2002, 
the Committee ordered the bill to be reported with a substitute 
amendment by a roll call vote of 9-0. The bill was reported on 
October 15, 2001, and a written report was filed on November 4, 
2002 (S. Rept. 107-330).

S. 1811--Presidential Appointments Improvement Act of 2002

    Ranking Minority Member Thompson and Chairman Lieberman 
introduced this legislation on December 12, 2001 with Senators 
Durbin, Akaka, Voinovich, and Lugar as co-sponsors, following 2 
days of hearings in April 2001 on ways to streamline the 
financial disclosure process for Executive Branch nominees. The 
bill would reduce the amount of financial information Executive 
Branch nominees and high level employees would have to provide, 
while retaining sufficient detail to determine conflicts of 
interest. It would also strengthen the public's right to know 
through a provision requiring a monthly, online list for easy 
tracking of disclosures of waivers of conflict of interest 
requirements.
    The Committee unanimously reported the bill out on March 
21, 2002 by voice vote, with an amendment that made several 
technical changes. The bill was reported on May 16, 2002 (S. 
Rept. 107-152).

S. 3054--No Taxation Without Representation Act of 2002

    This bill would entitle D.C. residents to elect two 
Senators and as many Members of the House of Representatives as 
Washington, D.C. would be apportioned based on its population 
if it were a State. (Under current apportionment standards, 
D.C. would receive one Representative.) The bill also provides 
that the permanent membership of the House of Representatives 
would be increased by one to 436. Chairman Lieberman introduced 
S. 3054 on October 3, 2002, and the bill was ordered to be 
reported favorably without amendment on October 9, 2002 by a 
roll call vote of 9-0. The bill was reported on October 10, 
2002, and a written report was filed on November 15, 2002 (S. 
Rept. 107-373).

H.R. 577--To require disclosure of sources and amounts of contributions 
        to presidential libraries

    H.R. 577 would amend the Presidential Libraries Act of 1955 
to make the fundraising process for presidential libraries open 
to public scrutiny by requiring the disclosure of the sources 
and amounts of certain donations made during and after a 
President's term in office. The bill was ordered reported out 
of the Committee without amendment on March 21, 2002, by voice 
vote; it was reported on June 11, 2002 (S. Rept. 107-160).

                     VIII. Presidential Nominations

    During the 107th Congress, the Committee received a total 
of 50 Presidential nominations. Of the nominations, 24 were 
favorably reported by the Committee and confirmed by the 
Senate, 13 were discharged from Committee and confirmed, five 
were withdrawn by the President, and eight were not acted upon 
by the Committee.
    The following 24 were favorably reported by the Committee 
and confirmed by the Senate:

       Joe M. Allbaugh, of Texas, to be Director of the Federal 
Emergency Management Agency. (Hearing held on February 13, 
2001)

       Othoneil ``Tony'' Armendariz, of Texas, to be a Member 
of the Federal Labor Relations Authority for a term expiring 
July 1, 2005. (Hearing held June 21, 2001)

       Dan Gregory Blair, of the District of Columbia, to be 
Deputy Director of the Office of Personnel Management. (Hearing 
held February 8, 2002)

       James E. Boasberg, of the District of Columbia, to be an 
Associate Judge of the Superior Court of the District of 
Columbia for a term of fifteen years. (Hearing held June 26, 
2002)

       Michael D. Brown, of Colorado, to be Deputy Director of 
the Federal Emergency Management Agency. (Hearing held June 19, 
2002)

       Erik Patrick Christian, of the District of Columbia, to 
be an Associate Judge of the Superior Court of the District of 
Columbia for a term of fifteen years. (Hearing held May 22, 
2001)

       Jeanette J. Clark, of the District of Columbia, to be an 
Associate Judge of the Superior Court of the District of 
Columbia for a term of fifteen years. (Hearing held March 5, 
2002)

       Todd Walther Dillard, of Maryland, to be United States 
Marshal for the Superior Court of the District of Columbia, 
Department of Justice, for a term of 4 years. (Hearing held May 
16, 2002)

       Nancy Dorn, of Texas, to be Deputy Director of the 
Office of Management and Budget. (Hearing held February 8, 
2002)

       Mark W. Everson, of Texas, to be Controller, Office of 
Federal Financial Management, Office of Management and Budget. 
(Hearing held October 11, 2001)

       Mark W. Everson, of Texas, to be Deputy Director for 
Management, Office of Management and Budget. (Hearing held July 
17, 2002)

       Ruth Y. Goldway, of California, to be a Commissioner, 
Postal Rate Commission for a term expiring November 22, 2008. 
(Hearing held October 8, 2002)

       John D. Graham, of Massachusetts, to be Administrator of 
the Office of Information and Regulatory Affairs, Office of 
Management and Budget. (Hearing held May 17, 2001)

       Tony Hammond, of Virginia, to be a Commissioner, Postal 
Rate Commission for the remainder of the term expiring October 
14, 2004, to which position he was appointed during the last 
recess of the Senate. (Hearing held October 8, 2002)

       John L. Howard, of Illinois, to be Chairman of the 
Special Panel on Appeals for a term of 6 years. (Hearing held 
February 8, 2002)

       Kay Coles James, of Virginia, to be Director of the 
Office of Personnel Management. (Hearing held June 21, 2001)

       Louis Kincannon, of Virginia, to be Director of the 
Census Bureau, Department of Commerce. (Hearing held February 
28, 2002)

       Lynn Leibovitz, of the District of Columbia, to be an 
Associate Judge of the Superior Court of the District of 
Columbia for a term of fifteen years. (Hearing held July 26, 
2001)

       Stephen A. Perry, of Ohio, to be Administrator, General 
Services Administration. (Hearing held May 17, 2001)

       Paul A. Quander, of the District of Columbia, to be 
Director of the District of Columbia Offender Supervision, 
Defender, and Courts Services Agency for a term of 6 years. 
(Hearing held April 11, 2002)

       Robert R. Rigsby, of the District of Columbia, to be an 
Associate Judge of the Superior Court of the District of 
Columbia for a term of fifteen years. (Hearing held May 16, 
2002)

       Maurice A. Ross, of the District of Columbia, to be an 
Associate Judge of the Superior Court of the District of 
Columbia for a term of fifteen years. (Hearing held May 22, 
2001)

       Angela Styles, of Virginia, to be Administrator for 
Federal Procurement Policy, Executive Office of the President. 
(Hearing held May 17, 2001)

       Odessa F. Vincent, of the District of Columbia, to be an 
Associate Judge of the Superior Court of the District of 
Columbia for a term of fifteen years. (Hearing held November 6, 
2001)

    There were 13 nominations in which the Committee was 
discharged with the concurrence of the Committee and the 
nominations confirmed by the Senate. Eight of these 13 
nominations are for Inspectors General which, according to a 
Standing Order of the Senate, are sequentially referred to the 
Committee and the Committee is subsequently discharged after 20 
days:

       Robert Watson Cobb, of Maryland, to be Inspector 
General, National Aeronautics and Space Administration.

       Mitchell E. Daniels, Jr., of Indiana, to be Director of 
the Office of Management and Budget. (Hearing held January 19, 
2001)

       Kenneth M. Donohue, Sr., of Virginia, to be Inspector 
General, Department of Housing and Urban Development.

       Clark Kent Ervin, of Texas, to be Inspector General, 
Department of State.

       Phyllis K. Fong, of Maryland, to be Inspector General, 
Department of Agriculture.

       J. Russell George, of Virginia, to be Inspector General, 
Corporation for National and Community Service.

       John Portman Higgins, of Virginia, to be Inspector 
General, Department of Education.

       Daniel R. Levinson, of Maryland, to be Inspector 
General, General Services Administration.

       Sean O'Keefe, of New York, to be Deputy Director of the 
Office of Management and Budget. (Hearing held February 27, 
2001)

       Alejandro Modesto Sanchez, of Florida, to be a Member of 
the Federal Retirement Thrift Investment Board for a term 
expiring October 11, 2006. (Hearing held November 15, 2002)

       Andrew M. Saul, of New York, to be Chairman of the 
Federal Retirement Thrift Investment Board for a term expiring 
September 25, 2004. (Hearing held November 15, 2002)

       Joseph E. Schmitz, of Maryland, to be Inspector General, 
Department of Defense.

       Gordon J. Whiting, of New York, to be a Member of the 
Federal Retirement Thrift Investment Board for a term expiring 
September 25, 2006. (Hearing held November 15, 2002)

    There were five nominations which were officially withdrawn 
by the President:

       James H. Atkins, of Arkansas, to be a Member of the 
Federal Retirement Thrift Investment Board.

       Sheryl R. Marshall, of Massachusetts, to be a Member of 
the Federal Retirement Thrift Investment Board.

       Stuart D. Rick, of Maryland, to be a Member of the Merit 
Systems Protection Board.

       Barbara J. Sapin, of Maryland, to be a Member of the 
Merit Systems Protection Board.

       Beth Susan Slavet, of Massachusetts, to be Chairman of 
the Merit Systems Protection Board.

    There were eight nominations not acted upon by the 
Committee:

       Dale Cabaniss, of Virginia, to be a Member of the 
Federal Labor Relations Authority for a term of 5 years 
expiring July 29, 2007.

       Albert Casey, of Texas, to be a Governor of the United 
States Postal Service for a term expiring December 8, 2009.

       Peter Eide, of Maryland, to be General Counsel of the 
Federal Labor Relations Authority for a term of 5 years.

       Susanne T. Marshall, of Virginia, to be Chairman of the 
Merit Systems Protection Board.

       Neil McPhie, of Virginia, to be a Member of the Merit 
Systems Protection Board for a term of 7 years expiring March 
1, 2009.

       James C. Miller, III, of Virginia, to be a Governor of 
the United States Postal Service for a term expiring December 
8, 2010.

       Fern Flanagan Saddler, of the District of Columbia, to 
be an Associate Judge of the Superior Court of the District of 
Columbia for a term of fifteen years.

       Linda M. Springer, of Virginia, to be Controller, Office 
of Federal Financial Management, Office of Management and 
Budget.

                  IX. ACTIVITIES OF THE SUBCOMMITTEES


      INTERNATIONAL SECURITY, PROLIFERATION, AND FEDERAL SERVICES 
                              SUBCOMMITTEE


                         Chairman: Thad Cochran


                Ranking Minority Member: Daniel K. Akaka


                              I. Hearings

    The Subcommittee on International Security, Proliferation, 
and Federal Services held the following hearings during the 
107th Congress:

FEMA's Role in Managing Bioterrorist Attacks and the Impact of Public 
        Health Concerns on Bioterrorism Preparedness (July 23, 2001).

    The Office of National Preparedness was created in the 
Federal Emergency Management Agency (FEMA) to implement a 
national effort against terrorism. The Subcommittee held a 
hearing to examine what role FEMA is taking in preparing 
communities and States for a biological event. How is FEMA 
ensuring that biological event issues are addressed and that 
their preparedness efforts support and encourage those in the 
Department of Health and Human Services? Is FEMA encouraging 
programs and activities on the State and local level to improve 
the public health infrastructure to both prepare and respond to 
a bioterrorist attack, naturally occurring epidemic, or any 
event that may cripple an area's health care system?
    Witnesses: Bruce Baughman, Director, Planning and 
Readiness, Federal Emergency Management Agency; Dr. Scott R. 
Lillibridge, Special Assistant to the Secretary, Department of 
Health and Human Services for National Security and Emergency 
Management; Dr. Tara J. O'Toole, Johns Hopkins Center for 
Civilian Biodefense Studies; and Dr. Dan Hanfling, FACEP, 
Chairman, Disaster Preparedness Committee, Inova Fairfax 
Hospital, Falls Church, Virginia.

S. 995--Whistleblower Protection Act Amendments (July 25, 2001).

    The Subcommittee held a hearing to examine legislation to 
amend the Whistleblower Protection Act (WPA) in order to 
restore and strengthen the protections available to Federal 
whistleblowers. The legislation seeks, among other things, to 
correct recent decisions by the U.S. Court of Appeals for the 
Federal Circuit which have limited the scope of the WPA. The 
hearing examined the recent holdings of the Federal Circuit 
which have excluded whistleblower protection for certain 
disclosures despite the repeated statements of congressional 
intent to protect ``any'' lawful disclosure. Witnesses 
commented on the need to cover any lawful disclosure without 
restriction to time, place, form, motive, or context, or prior 
disclosure made to any person by an employee or applicant, 
including a disclosure made in the ordinary course of an 
employee's duties, that the employee or applicant reasonably 
believes is credible evidence of any violation of any law, 
rule, or regulation, or other misconduct.
    Witnesses also testified on the need for independent 
litigating authority for the Office of Special Counsel (OSC). 
Currently, the OSC has no authority to request that the Merit 
Systems Protection Board (MSPB) reconsider one of its decisions 
or to seek review of an MSPB decision by the U.S. Court of 
Appeals for the Federal Circuit. Even when another party with 
authority to petition for a review of an MSPB decision does so, 
OSC has historically been denied the right to participate in 
those proceedings. In addition, when the OSC believes that MSPB 
misinterprets one of the laws within OSC's jurisdiction, the 
OSC has no right to appeal that decision, even if it was one of 
the parties before the MSPB. Under current law, while the 
Office of Personnel Management (OPM) can request that the MSPB 
reconsider its rulings, OSC cannot. According to witnesses, the 
limitation undermines both OSC's ability to protect 
whistleblowers and the integrity of the whistleblower law.
    Witnesses also testified on a provision in S. 995 which 
codifies an anti-gag provision that has been passed annually 
since 1988 as part of the appropriations process. The provision 
states that employees should not be forced to sign disclosure 
agreements or be subjected to nondisclosure rules or policies 
that supercede an employee's rights under good government 
statutes. It bans agencies from implementing or enforcing any 
nondisclosure policy, form or agreement that does not contain 
specified language preserving open government statutes such as 
the WPA, the Military Whistleblower Protection Act, and the 
Lloyd Lafollette Act, which prohibits discrimination against 
government employees who communicate with Congress.
    The hearing also covered other provisions of S. 995, as 
well as additional reforms necessary to protect whistleblowers 
such as overturning the ``irrefragable proof '' standard 
implemented by the Federal Circuit for determining reasonable 
belief in whistleblower cases and a loophole allowing 
whistleblowers to be fired under the guise of losing their 
security clearance.
    Witnesses: Hon. Charles E. Grassley, U.S. Senator; Hon. 
Elaine Kaplan, Special Counsel, Office of Special Counsel; Hon. 
Beth S. Slavet, Chairman, U.S. Merit Systems Protection Board; 
and Thomas Devine, Legal Director, Government Accountability 
Project. And written statements of Stewart E. Schiffer, Acting 
Attorney General, Civil Division, Department of Justice; and 
Colleen M. Kelley, National President, National Treasury 
Employees Union.

The Annual Report of the Postmaster General and the Impact of Terrorist 
        Attacks on Postal Operations (September 20, 2001).

    In the aftermath of the domestic terrorist attacks on 
September 11, 2001, the Subcommittee expanded its annual 
hearing on the state of the U.S. Postal Service to learn what 
steps the Service had taken to secure the mail and operations 
of the Postal Service. The hearing noted that America's 
recovery from the terrorist attacks requires a strong and 
viable Postal Service. Delivery of the U.S. mail is a basic and 
fundamental public service that must be protected from 
disruption. The hearing also noted that the added costs 
associated with ensuring the continuation of this reliable and 
efficient service would have to be addressed, especially in 
light of the continued drop in mail volume and revenue.
    Witnesses: Hon. John E. Potter, Postmaster General and 
Chief Executive Officer, U.S. Postal Service; Kenneth C. 
Weaver, Chief Postal Inspector, U.S. Postal Service; and a 
written statement from Karla W. Corcoran, Inspector General, 
U.S. Postal Service.

Terrorism Through the Mail: Protecting Postal Workers and the Public, 
        Joint Hearings of the Governmental Affairs Committee and the 
        Subcommittee on International Security, Proliferation, and 
        Federal Services (October 30 and October 31, 2001).

    Two days of hearings were held to learn whether adequate 
steps were taken to protect postal workers and the public from 
future terrorist attacks, especially from biological attacks 
through the mail using agents such as anthrax. Of particular 
interest was whether the Centers for Disease Control and the 
Postal Service were aggressive enough in protecting postal 
workers and the public.
    Witnesses: Hon. John E. Potter, Postmaster General/CEO, 
U.S. Postal Service, accompanied by Thomas Day, Vice President 
of Engineering, Patrick Donahoe, Chief Operating Officer and 
Executive Vice President, U.S. Postal Service, and Ken Weaver, 
Chief Postal Inspector, U.S. Postal Inspection Service; William 
Burrus, President-Elect, American Postal Workers Union (AFL-
CIO), accompanied by Denise Manley, Distribution Clerk, 
Government Mail Section, Brentwood Mail Processing Facility; 
Vincent R. Sombrotto, President, National Association of Letter 
Carriers (NALC), accompanied by Tony DiStephano, Jr., 
President, NALC Branch 380, Trenton, New Jersey; William Quinn, 
National President, National Postal Mail Handlers Union; and 
Gus Baffa, President, National Rural Letter Carriers' 
Association (NRLCA).

The Role of Bilateral and Multilateral Arms Control Agreements in 
        Controlling Threats From the Proliferation of Weapons of Mass 
        Destruction (Five days of hearings were combined under this 
        title with listed titles for the following dates:)

(1) Current and Future Weapons of Mass Destruction (WMD) Proliferation 
        Threats (November 7, 2001).

    The Subcommittee held a hearing to explore sources of 
chemical, biological, and nuclear threats and to examine how 
export controls may be best employed to curb weapons of mass 
destruction (WMD) proliferation. The widened means to acquire 
WMD has affected the utility of export controls. Global 
commercial networks enable nations to simply buy these 
materials and technologies instead of developing them 
indigenously. The utility of export controls will depend on how 
multilateral export control policies are pursued and 
implemented by partner nations. Witnesses reviewed the present 
and future weapons of mass destruction threats of greatest 
concern, the dual use technologies used to develop WMD, the 
most effective export control mechanisms to curb WMD 
proliferation, and whether a new export control process or 
agency was needed.
    Witnesses: Dr. Michael L. Moodie, President, Chemical and 
Biological Arms Control Institute; Dr. Jonathan B. Tucker, 
Director, Chemical and Biological Nonproliferation Program, 
Center for Nonproliferation Studies, Monterey Institute of 
International Studies; Rose Gottemoeller, Senior Associate, 
Carnegie Endowment for International Peace; Joseph A. 
Christoff, Director, International Affairs and Trade, U.S. 
General Accounting Office; Dr. Richard Cupitt, Associate 
Director, Center for International Trade and Security; Dr. 
James A. Lewis, Senior Fellow and Director of Technology 
Policy, Center for Strategic and International Studies; and Dr. 
Gary Milhollin, Director, Wisconsin Project on Nuclear Arms 
Control.

(2) Combating Proliferation of Weapons of Mass Destruction (WMD) with 
        Non-Proliferation Programs: Non-Proliferation Assistance 
        Coordination Act of 2001, Part I (November 14, 2001).

    The collapse of the Soviet Union left stockpiles of nuclear 
weapons, materials, facilities, and technology vulnerable to 
theft and diversion to terrorist networks and rogue states. 
Congress established an array of threat reduction programs to 
assist in dismantling former Soviet weapons of mass destruction 
and improve the security of such weapons, materials and human 
expertise. The Subcommittee held a hearing to review the Non-
Proliferation Assistance Coordination Act of 2001 within the 
broader context of what role non-proliferation programs should 
have in a comprehensive non-proliferation strategy. In the 
first part of this hearing, outside witnesses examined current 
non-proliferation programs in the Former Soviet Union and 
addressed the following questions: (1) How would the 
establishment of an interagency committee, such as advocated by 
the Non-Proliferation Assistance Coordination Act, make these 
programs more effective? (2) How would public and private 
sector efforts be harmonized? and (3) Are there new programs 
that should be considered?
    Witnesses: Hon. Chuck Hagel, U.S. Senator; Gary L. Jones 
(Ms.), Director of Nuclear and Nonproliferation Issues, General 
Accounting Office Division of Natural Resources and 
Environment; Dr. Laura S.H. Holgate, Vice President for Russia/
Newly Independent States Programs, Nuclear Threat Initiative; 
and Leonard S. Spector, Deputy Director, Center for 
Nonproliferation Studies, Monterey Institute of International 
Studies.

(3) Combating Proliferation of Weapons of Mass Destruction (WMD) with 
        Non-Proliferation Programs: The Non-Proliferation Assistance 
        Coordination Act of 2001, Part II (November 29, 2001).

    The Subcommittee held a hearing to consider administration 
views of the Non-Proliferation Assistance Coordination Act of 
2001 within the broader context of what role non-proliferation 
programs should have in a comprehensive national non-
proliferation strategy. Part II included representatives from 
the Departments of Energy, Defense, State, and Commerce to 
discuss their current programs, coordination efforts, and the 
impact of their efforts from the Bush-Putin Summit. The hearing 
examined current non-proliferation programs in the former 
Soviet Union.
    Witnesses: Vann H. Van Diepen, Acting Deputy Assistant 
Secretary of State, Bureau of Non-proliferation, U.S. 
Department of State; Marshall S. Billingslea, Acting Deputy 
Assistant Secretary of Defense for Negotiation Policy, U.S. 
Department of Defense; Kenneth E. Baker, Principal Assistant 
Deputy Administrator for Defense Nuclear Nonproliferation, 
National Nuclear Security Administration, U.S. Department of 
Energy; and Matthew S. Borman, Deputy Assistant Secretary, 
Bureau of Export Administration, U.S. Department of Commerce.

(4) Multilateral Non-Proliferation Regimes, Weapons of Mass Destruction 
        Technologies, and the War on Terrorism (February 12, 2002).

    The Subcommittee held a hearing to assess U.S. relations 
with multilateral non-proliferation regimes and provide 
recommendations for how such regimes may be best incorporated 
into the war on terrorism and for preventing the spread of 
weapons of mass destruction (WMD). The hearing reviewed the 
effectiveness of five regimes: The Biological Weapons 
Convention (BWC), the Chemical Weapons Convention (CWC), the 
Non-Proliferation Treaty (NPT), the International Atomic Energy 
Agency (IAEA), and the Missile Technology Control Regime 
(MTCR). Witnesses addressed the following questions: (1) How 
can multilateral regimes best support the current war on 
terrorism? (2) How can verification be made more effective? (3) 
How do technology controls contribute to regime effectiveness? 
and (4) How can the treaties best address non-state actors and 
terrorist groups?
    Witnesses: Elisa D. Harris, Research Fellow, Center for 
International and Security Studies; Dr. Amy E. Smithson, Ph.D., 
Director, Chemical and Biological Weapons Nonproliferation 
Project, Henry L. Stimson Center; Dr. Jim Walsh, Research 
Fellow, Belfer Center for Science and International Affairs, 
John F. Kennedy School of Government, Harvard University; and 
Dennis M. Gormley, Senior Fellow, International Institute for 
Strategic Studies.

(5) Strengthening Multilateral Non-Proliferation Regimes (July 29, 
        2002).

    The threat of weapons of mass destruction (WMD) terrorism 
magnifies the significance of sound multilateral policies to 
U.S. national security. The Subcommittee held a hearing to 
examine multilateral arms control regimes within the context of 
global WMD terrorism from state and non-state actors. 
Administration witnesses addressed the effectiveness of current 
non-proliferation regimes in preventing or delaying 
proliferation of WMD, the relevance of non-proliferation 
arrangements and organizations to preventing terrorists and 
other non-state actors from acquiring WMD, the steps the United 
States is taking to increase these regimes' effectiveness, and 
emerging technological threats that these regimes are not 
handling or are not equipped to handle. The hearing covered the 
following regimes and international organizations: The 
Australia Group, the Biological Weapons Convention, the 
Chemical Weapons Convention, the Non-Proliferation Treaty, the 
International Atomic Energy Agency, the Wassanaar Arrangement, 
the Zangger Committee, and the Missile Technology Control 
Regime.
    Witnesses: Vann H. Van Diepen, Director, Office of 
Chemical, Biological and Missile Nonproliferation, U.S. 
Department of State, and Marshall S. Billingslea, Deputy 
Assistant Secretary of Defense, U.S. Department of Defense.

United States Policy in Iraq: Next Steps (March 1, 2002).

    The Subcommittee held a hearing to identify the weapons of 
mass destruction (WMD) threat posed by Iraq and examine 
different policies to address U.S. national security concerns. 
Prior to the 1991 Persian Gulf War, Iraq was identified as a 
significant national security threat within U.S. foreign policy 
and the national security establishment. Since the end of the 
Persian Gulf War and the broader consciousness of WMD 
terrorism, Iraq has endured as a national security concern.
    As of the date of the hearing, many differed on what form 
U.S. policies should take in Iraq. Some believed Iraq was the 
most immediate threat to national security and swift military 
intervention and regime change should take the first priority. 
Others stressed that U.S. policy must include strong 
international support and not threaten broader multilateral 
efforts against international terrorism. Witnesses discussed 
the potential consequences of these policy options to the 
broader efforts against terrorism and international national 
security and addressed how policies can be formulated to ensure 
they do not create broader national security problems than 
those they intend to eliminate.
    Witnesses: Robert J. Einhorn, Senior Adviser, International 
Studies Program, Center for Strategic and International 
Studies; Dr. David A. Kay, Vice President, Science Applications 
International Corporation; and Dr. Richard O. Spertzel, former 
head of UN Special Commission (UNSCOM) Biological Weapon 
Inspections and former Deputy Commander, U.S. Army Medical 
Research Institute of Infectious Disease (USAMRIID).

CIA National Intelligence Estimate of Foreign Missile Developments and 
        the Ballistic Missile Threat through 2015 (March 11, 2002).

    The Subcommittee held its annual hearing to review the 
Central Intelligence Agency's (CIA) fourth National 
Intelligence Estimate (NIE) of foreign missile developments and 
ballistic missile threats. The NIE is the compilation of the 
Intelligence Community's latest intelligence on ballistic 
missile developments and threats and a discussion of threats 
from nonmissile delivery options for weapons of mass 
destruction. The NIE describes projections of likely missile 
threats, assessments of theater ballistic missile threats 
worldwide, the evolving proliferation environment and 
importance of foreign assistance to developing missile 
programs, and summary of forward-based threats and cruise 
missiles.
    Witness: Robert Walpole, National Intelligence Officer for 
Strategic and Nuclear Programs, National Intelligence Council, 
CIA.

Critical Skills for National Security and the Homeland Security Federal 
        Workforce Act--S. 1800 (March 12, 2002).

    The Subcommittee held a hearing to review the need for more 
people with critical skills in math, science, and foreign 
languages in the Federal Government and to examine ways S. 
1800, the Homeland Security Federal Workforce Act, would 
strengthen the recruitment and retention of Federal employees 
through student loan repayment, national security fellowship 
programs, and management reforms. Witnesses addressed the broad 
national security implications of shortages of Federal workers 
with specific skills in math, science, and foreign languages. 
Witnesses examined the critical skills needed in government and 
responded to the following questions: (1) How can the 
provisions in S. 1800 strengthen math, science, and foreign 
language skills in government? (2) How has the national 
security environment affected the need for these skills? and 
(3) How could S. 1800 complement existing recruitment and 
retention efforts in the Federal Government?
    Witnesses: Donald J. Winstead, Assistant Director, 
Compensation Administration, Office of Personnel Management 
(OPM); Sheri A. Farrar, Assistant Director, Administrative 
Services Division, Federal Bureau of Investigation (FBI), 
accompanied by Margaret R. Gulotta, Chief of the Language 
Services Unit, and Leah Meisel, Deputy Assistant Director and 
Personnel Officer, Federal Bureau of Investigation; Ruth A. 
Whiteside, Principal Deputy Assistant Secretary, Bureau of 
Human Resources, Department of State (DOS); Ginger Groeber, 
Acting Deputy Assistant Secretary, Civilian Personnel Policy, 
Department of Defense (DOD); Harvey A. Davis, Associate 
Director, Human Resource Services, National Security Agency 
(NSA); Hon. Lee H. Hamilton, Director of the Woodrow Wilson 
Center for International Scholars; Dr. Susan S. Westin, 
Managing Director for International Affairs and Trade Issues, 
General Accounting Office (GAO); and Dr. Ray T. Clifford, 
Chancellor, Defense Language Institute.

The Federal Workforce: Legislative Proposals for Change (March 18 and 
        19, 2002).

    The Subcommittee held two days of hearings on legislative 
proposals that addressed how to achieve a strong Federal civil 
service workforce. The hearings focused on current and future 
workforce challenges in recruiting, hiring, training, and 
retention. Questions were raised as to whether agencies have 
sufficient personnel funding needed to attract, retain, train, 
and motivate employees. Federal retirements and stiff 
competition for new talent magnify this challenge. Witnesses 
evaluated legislative proposals for their suitability to 
strengthen the Federal Government as an employer of choice and 
addressed the following questions: (1) What are the most 
critical funding requirements to address the government's 
workforce needs? (2) How can legislative proposals improve the 
civil service while preserving the rights of the Federal 
workforce? (3) How can existing and new managerial 
flexibilities be made effective and fair to Federal workers? 
(4) What additional resources and training do Federal agencies 
require to make existing managerial flexibilities effective? 
(5) How can recruitment, retention, compensation, and 
management challenges be reconciled with personnel ceiling 
limitations and contracting out quotas?
    Witnesses: First day: Hon. Kay Coles James, Director, 
Office of Personnel Management (OPM); Hon. David M. Walker, 
Comptroller General, General Accounting Office (GAO); Colleen 
M. Kelley, National President, National Treasury Employees 
Union (NTEU); Bobby L. Harnage, Sr., National President, 
American Federation of Government Employees (AFGE) (AFL-CIO); 
G. Jerry Shaw, General Counsel, Senior Executives Association 
(SEA); and John C. Priolo, General Executive Board Member, 
Federal Managers Association (FMA).
    Second day: Dr. Paul C. Light, Senior Advisor, National 
Commission on the Public Service, Vice President and Director 
of Government Studies, The Brookings Institution; Dr. Carolyn 
Ban, Dean, Graduate School of Public and International Affairs, 
University of Pittsburgh and President, National Association of 
Schools of Public Affairs and Administration; Max Stier, 
President, Partnership for Public Service; and Dr. Steven J. 
Kelman, Professor of Public Management, John F. Kennedy School 
of Government, Harvard University.

The Postal Service in the 21st Century: The USPS Transformation Plan 
        (May 13, 2002).

    The Subcommittee held a hearing that reviewed the U.S. 
Postal Service's Transformation Plan and a GAO report on the 
financial condition of the Postal Service. Both the 
Transformation Plan, which was released on April 4, 2002, and 
the GAO assessment, were prepared at the request of the 
Subcommittee and the Committee on Governmental Affairs. This 
Subcommittee has long been concerned with the long-term 
structural, financial, and operational challenges facing the 
Postal Service, which is the linchpin to the nation's $900 
billion domestic mailing industry employing nine million 
workers. This hearing built on previous hearings that focused 
on the accountability and transparency of postal finances and 
operations.
    Witnesses: Hon. John E. Potter, Postmaster General, U.S. 
Postal Service, and Hon. David M. Walker, Comptroller General, 
General Accounting Office (GAO).

Russia and China: Non-Proliferation Concerns and Export Controls (June 
        6, 2002).

    The Subcommittee held a hearing to identify recent 
proliferation activity from Russia and China and the methods 
they use to enact export controls per international agreements. 
This hearing, one in a series of hearings on non-proliferation, 
addressed the supply-side of weapons of mass destruction and 
missile proliferation and concentrated on the two biggest 
exporters: Russia and China. Concerns have been raised 
regarding the extent to which Russia and China, with their 
highly developed nuclear, chemical, biological and missile 
industries, comply with non-proliferation agreements and 
enforce export controls.
    Hearing witnesses were asked to address the following 
issues: (1) What are the recent proliferation concerns from 
Russia and China? (2) Have Russia and China complied with 
multilateral export control agreements and enforced domestic 
regulations? (3) Are failures the result of an ineffective 
export control administration, a lack of resources, or a lack 
of interest by the government in compliance? (4) What 
assistance has or is the United States providing these 
countries to assist them in developing effective export control 
policies?
    Witnesses: John S. Wolf, Assistant Secretary, Bureau of 
Nonproliferation, U.S. Department of State; Matthew S. Borman, 
Deputy Administrator, Bureau of Industry and Security, U.S. 
Department of Commerce; Leonard S. Spector, Deputy Director, 
Center for Nonproliferation, Monterey Institute for 
International Studies; David Albright, President, Institute for 
Science and International Security; and Gary Milholin, 
Director, Wisconsin Project on Nuclear Arms Control.

Cruise Missile and UAV Threats to the United States (June 11, 2002).

    The Subcommittee held a hearing to examine the extent of 
cruise missile proliferation, the threat cruise missiles pose 
to American forward deployed forces and U.S. territory, 
difficulties faced in stemming the spread of cruise missile 
systems and technology, and the ability of the Missile 
Technology Control Regime (MTCR) to control cruise missiles and 
unmanned aerial vehicles. The National Intelligence Estimate on 
Foreign Missile Developments predicts that one to two dozen 
countries will possess a land-attack cruise missile capability 
by 2015 through indigenous development, acquisition, or 
modification of other systems, such as unmanned aerial 
vehicles. MTCR is the international regime set up to stem the 
spread of cruise missiles. However, member nations focus almost 
entirely on ballistic missiles and do not have standard ground 
rules on cruise missile performance. Hearing witnesses were 
asked to address the following questions: (1) How aggressively 
are nations pursuing cruise missile purchases as complete 
systems and developing indigenous capabilities? (2) What MTCR 
provisions address cruise missile proliferation? What 
challenges do the link between cruise missiles and the aircraft 
industry pose to the MTCR's effectiveness? (3) How do unmanned 
aerial vehicles complicate cruise missile controls? (4) What 
measures other than the MTCR are being taken currently to stem 
cruise missile proliferation? and (5) What is the current 
status of efforts to improve the effectiveness of the MTCR?
    Witnesses: Vann H. Van Diepen, Acting Deputy Assistant 
Secretary, Bureau of Nonproliferation, U.S. Department of 
State; Christopher Bolkcom, Analyst in National Defense, 
Foreign Affairs, Defense and Trade Division, Congressional 
Research Service; and Dennis Gormley, Senior Fellow, 
International Institute for Strategic Studies.

The Annual Report of the Postmaster General (September 27, 2002).

    The Subcommittee held its annual hearing to receive the 
Postmaster General's report to the Senate on the state of the 
U.S. Postal Service. The hearing also continued the 
Subcommittee's oversight of the Postal Service's Transformation 
Plan requested by the Subcommittee and Committee on 
Governmental Affairs.
    Witness: Hon. John E. Potter, Postmaster General, U.S. 
Postal Service.

                            II. Legislation

    The following is a list of the measures that were 
considered by the Subcommittee on International Security, 
Proliferation, and Federal Services and became public law:

    S. 201, the Federal Employee Protection Act, a bill to 
require that Federal agencies be accountable for violations of 
antidiscrimination and whistleblower protection laws, and for 
other purposes (As H.R. 169, Public Law 107-174).
    S. 271, a bill to amend title 5, United States Code, to 
provide that the mandatory separation age for Federal 
firefighters be made the same as the age that applies with 
respect to Federal law enforcement officers (As H.R. 93, Public 
Law 107-27).
    S. 529, a bill to provide wage parity for certain 
Department of Defense prevailing rate employees in Georgia 
(Incorporated in H.R. 3338, Public Law 107-117).
    S. 1080, a bill to provide that employees who retire as 
registered nurses under the Federal Employees Retirement System 
shall have unused sick leave used in the computation of 
annuities (Incorporated in H.R. 3447, Public Law 107-135).
    S. 1256, a bill to reauthorize the Breast Cancer Research 
Postage Stamp (Incorporated in H.R. 2590, Public Law 107-67).
    S. 1286, a bill to authorize executive agencies to use 
appropriated funds for salaries and expenses to provide child 
care in Federal or leased facilities, or through contracts, for 
civilian employees. The bill requires amounts used to be 
applied to improve the affordability of child care for lower 
income employees (Incorporated in H.R. 2590, Public Law 107-
67).
    S. 1369 and S. 1498, bills to provide that Federal 
employees, members of the foreign service, members of the 
uniformed services, family members and dependents of such 
employees and members, may retain for personal use promotional 
items received as a result of official government travel 
(Incorporated in H.R. 3338, Public Law 107-117).
    S. 1713, a bill to amend title 39, USC, to direct the 
Postal Service to adhere to an equitable tender policy in 
selecting air carriers of non-priority bypass mail to certain 
points in Alaska (Incorporated in H.R. 4775, Public Law 107-
206).
    S. 1822, a bill to allow the Thrift Savings Plan to offer 
certain catch up contributions for beneficiaries age 50 and 
over, as provided by the Internal Revenue Code. (As H.R. 3340, 
Public Law 107-304).
    S. 2527, a bill to allow certain employees and annuitants 
of the Overseas Private Investment Corporation to transfer to 
the Federal Employee Health Benefits program (As H.R. 3340, 
Public Law 107-304).
    S. 3070, a bill authorizing appropriations for the Merit 
Systems Protection Board and the Office of Special Counsel 
(reauthorization provisions included in H.R. 3340, Public Law 
107-304).
    H.R. 2559, a bill to amend chapter 90 of title 5, USC, to 
make technical corrections to the Federal long-term care 
insurance program (Public Law 107-104).

    In addition, the following measure was favorably reported 
by the Subcommittee and passed by the Senate:

    S. 2936, a bill to amend chapter 84 of title 5, United 
States Code, to provide that certain Federal annuity 
computations are adjusted by 1 percentage point relating to 
periods of receiving disability payments.

                        Post Office Naming Bills


    Measures Favorably Reported by Subcommittee and Enacted Into Law

    H.R.132, a bill to designate the facility of the United 
States Postal Service located at 620 Jacaranda Street in Lanai 
City, Hawaii, as the ``Goro Hokama Post Office Building'' 
(Public Law 107-6).
    H.R. 364, a bill to designate the facility of the United 
States Postal Service located at 5927 Southwest 70th Street in 
Miami, Florida, as the ``Marjory Williams Scrivens Post 
Office'' (Public Law 107-29).
    H.R. 395, a bill to designate the facility of the United 
States Postal Service located at 2305 Minton Road in West 
Melbourne, Florida, as the ``Ronald W. Reagan Post Office of 
West Melbourne, Florida'' (Public Law 107-7).
    H.R. 669, a bill to designate the facility of the United 
States Postal Service located at 127 Social Street in 
Woonsocket, Rhode Island, as the ``Alphonse F. Auclair Post 
Office Building'' (Public Law 107-261).
    H.R. 670, a bill to designate the facility of the United 
States Postal Service located at 7 Commercial Street in 
Newport, Rhode Island, as the ``Bruce F. Cotta Post Office 
Building'' (Public Law 107-262).
    H.R. 821, a bill to designate the facility of the United 
States Postal Service located at 1030 South Church Street in 
Asheboro, North Carolina, as the ``W. Joe Trogdon Post Office 
Building'' (Public Law 107-32).
    H.R. 1374, a bill to designate the facility of the United 
States Postal Service located at 600 Calumet Street in Lake 
Linden, Michigan, as the ``Philip E. Ruppe Post Office 
Building'' (Public Law 107-191).
    H.R. 1432, a bill to designate the facility of the United 
States Postal Service located at 3698 Inner Perimeter Road in 
Valdosta, Georgia, as the ``Major Lyn McIntosh Post Office 
Building'' (Public Law 107-160).
    H.R. 1748, a bill to designate the facility of the United 
States Postal Service located at 805 Glen Burnie Road in 
Richmond, Virginia, as the ``Tom Bliley Post Office Building'' 
(Public Law 107-161).
    H.R. 1749, a bill to designate the facility of the United 
States Postal Service located at 685 Turnberry Road in Newport 
News, Virginia, as the ``Herbert H. Bateman Post Office 
Building'' (Public Law 107-162).
    H.R. 1753, a bill to designate the facility of the United 
States Postal Service located at 419 Rutherford Avenue, N.E., 
in Roanoke, Virginia, as the ``M. Caldwell Butler Post Office 
Building'' (Public Law 107-35).
    H.R. 1761, a bill to designate the facility of the United 
States Postal Service located at 8588 Richmond Highway in 
Alexandria, Virginia, as the ``Herb Harris Post Office 
Building'' (Public Law 107-92).
    H.R. 1766, a bill to designate the facility of the United 
States Postal Service located at 4270 John Marr Drive in 
Annandale, Virginia, as the ``Stan Parris Post Office 
Building'' (Public Law 107-85).
    H.R. 2577, a bill to designate the facility of the United 
States Postal Service located at 310 South State Street in St. 
Ignace, Michigan, as the ``Bob Davis Post Office Building'' 
(Public Law 107-163).
    H.R. 2876, a bill to designate the facility of the United 
States Postal Service located in Harlem, Montana, as the 
``Francis Bardanouve United States Post Office Building'' 
(Public Law 107-164).
    H.R. 2910, a bill to designate the facility of the United 
States Postal Service located at 3131 South Crater Road in 
Petersburg, Virginia, as the ``Norman Sisisky Post Office 
Building'' (Public Law 107-165).
    H.R. 3072, a bill to designate the facility of the United 
States Postal Service located at 125 Main Street in Forest 
City, North Carolina, as the ``Vernon Tarlton Post Office 
Building'' (Public Law 107-166).
    H.R. 3248, a bill to designate the facility of the United 
States Postal Service located at 65 North Main Street in 
Cranbury, New Jersey, as the ``Todd Beamer Post Office 
Building'' (Public Law 107-129).
    H.R. 3287, a bill to redesignate the facility of the United 
States Postal Service located at 900 Brentwood Road, NE, in 
Washington, D.C., as the ``Joseph Curseen, Jr. and Thomas 
Morris, Jr. Processing and Distribution Center'' (Public Law 
107-225).
    H.R. 3379, a bill to designate the facility of the United 
States Postal Service located at 375 Carlls Path in Deer Park, 
New York, as the ``Raymond M. Downey Post Office Building'' 
(Public Law 107-167).
    H.R. 3738, a bill to designate the facility of the United 
States Postal Service located at 1299 North 7th Street in 
Philadelphia, Pennsylvania, as the ``Herbert Arlene Post Office 
Building'' (Public Law 107-264).
    H.R. 3739, a bill to designate the facility of the United 
States Postal Service located at 6150 North Broad Street in 
Philadelphia, Pennsylvania, as the ``Rev. Leon Sullivan Post 
Office Building'' (Public Law 107-265).
    H.R. 3740, a bill to designate the facility of the United 
States Postal Service located at 925 Dickinson Street in 
Philadelphia, Pennsylvania, as the ``William A. Cibotti Post 
Office Building'' (Public Law 107-266).
    H.R. 3960, a bill to designate the facility of the United 
States Postal Service located at 3719 Highway 4 in Jay, 
Florida, as the ``Joseph W. Westmoreland Post Office Building'' 
(Public Law 107-193).
    H.R. 4717, a bill to designate the facility of the United 
States Postal Service located at 1199 Pasadena Boulevard in 
Pasadena, Texas, as the ``Jim Fonteno Post Office Building'' 
(Public Law 107-268).
    H.R. 4755, a bill to designate the facility of the United 
States Postal Service located at 204 South Broad Street in 
Lancaster, Ohio, as the ``Clarence Miller Post Office 
Building'' (Public Law 107-269).
    H.R. 4794, a bill to designate the facility of the United 
States Postal Service located at 1895 Avenida Del Oro in 
Oceanside, California, as the ``Ronald C. Packard Post Office 
Building'' (Public Law 107-270).
    H.R. 5207, a bill to designate the facility of the United 
States Postal Service located at 6101 West Old Shakopee Road in 
Bloomington, Minnesota, as the ``Thomas E. Burnett, Jr. Post 
Office Building'' (Public Law 107-227).
    H.R. 5308, a bill to designate the facility of the United 
States Postal Service located at 301 South Howes Street in Fort 
Collins, Colorado, as the ``Barney Apodaca Post Office'' 
(Public Law 107-283).
    H.R. 5333, a bill to designate the facility of the United 
States Postal Service located at 4 East Central Street in 
Worcester, Massachusetts, as the ``Joseph D. Early Post Office 
Building'' (Public Law 107-284).
    H.R. 5574, a bill to designate the facility of the United 
States Postal Service located at 206 South Main Street in 
Glennville, Georgia, as the ``Michael Lee Woodcock Post 
Office'' (Public Law 107-291).
    S. 737, a bill to designate the facility of the United 
States Postal Service located at 811 South Main Street in 
Yerington, Nevada, as the ``Joseph E. Dini, Jr. Post Office'' 
(Public Law 107-144).
    S. 970, a bill to designate the facility of the United 
States Postal Service located at 39 Tremont Street, Paris Hill, 
Maine, as the ``Horatio King Post Office Building'' (Public Law 
107-145).
    S. 985, a bill to designate the facility of the United 
States Postal Service located at 113 South Main Street in 
Sylvania, Georgia, as the ``G. Elliot Hagan Post Office 
Building'' (as H.R. 1183, Public Law 107-34).
    S. 1026, a bill to designate the United States Post Office 
located at 60 Third Avenue in Long Branch, New Jersey, as the 
``Pat King Post Office Building.'' (as H.R. 2997, Public Law 
107-146).
    S. 1181, a bill to designate the facility of the United 
States Postal Service located at 2719 South Webster Street in 
Kokomo, Indiana, as the ``Elwood Haynes `Bud' Hillis Post 
Office Building'' (as H.R. 2043, Public Law 107-36).
    S. 1184, a bill to designate the facility of the United 
States Postal Service located at 2853 Candler Road in Decatur, 
Georgia, as the ``Earl T. Shinhoster Post Office'' (as H.R. 
2261, Public Law 107-86).
    S. 1222, a bill to redesignate the facility of the United 
States Postal Service located at 89 River Street in Hoboken, 
New Jersey, as the ``Frank Sinatra Post Office Building'' (as 
H.R. 3034, Public Law 107-263).
    S. 1381, a bill to redesignate the facility of the United 
States Postal Service located at 5472 Crenshaw Boulevard in Los 
Angeles, California, as the ``Congressman Julian C. Dixon Post 
Office'' (as H.R. 2454, Public Law 107-88).
    S. 1970, a bill to designate the facility of the United 
States Postal Service located at 2829 Commercial Way in Rock 
Springs, Wyoming, as the ``Teno Roncalio Post Office Building'' 
(as H.R. 3789, Public Law 107-192).
    S. 2217, a bill to designate the facility of the United 
States Postal Service located at 3101 West Sunflower Avenue in 
Santa Anna, California, as the ``Hector G. Godinez Post Office 
Building'' (as H.R. 1366, Public Law 107-190).
    S. 2433, a bill to designate the facility of the United 
States Postal Service located at 1590 East Joyce Boulevard in 
Fayetteville, Arkansas, as the ``Clarence B. Craft Post Office 
Building'' (as H.R. 4486, Public Law 107-194).
    S. 2828, a bill to redesignate the facility of the United 
States Postal Service located at 6910 South Yorktown Avenue in 
Tulsa, Oklahoma, as the ``Robert Wayne Jenkins Station'' (as 
H.R. 4851, Public Law 107-272).
    S. 2840, a bill to designate the facility of the United 
States Postal Service located at 120 North Maine Street in 
Fallon, Nevada, as the ``Rollan D. Melton Post Office 
Building'' (as H.R. 4102, Public Law 107-267).
    S. 2918, a bill to designate the facility of the United 
States Postal Service located at 380 Main Street in 
Farmingdale, New York, as the ``Peter J. Ganci, Jr. Post Office 
Building'' (as H.R. 5336, Public Law 107-285).
    S. 2929, a bill to redesignate the facility of the United 
States Postal Service located at 265 South Western Avenue, Los 
Angeles, California, as the ``Nat King Cole Post Office'' (as 
H.R. 4797, Public Law 107-271).
    S. 2931, a bill to designate the facility of the United 
States Postal Service located at 5805 White Oak Avenue in 
Encino, California, as the ``Francis Dayle `Chick' Hearn Post 
Office'' (as H.R. 5340, Public Law 107-286).

  Measures Favorably Reported by Subcommittee and Passed by the Senate

    S. 1983, a bill to designate the facility of the United 
States Postal Service located at 201 Main Street, Lake Placid, 
New York, as the ``John A. `Jack' Shea Post Office Building.''

                      III. REPORT AND GAO REPORTS

    1. Assessment of Remote Sensing Data Use by Civilian 
Federal Agencies. In December 2001, Subcommittee Chairman 
Daniel K. Akaka released a study prepared by Subcommittee staff 
that examined the responses of 20 agencies which participated 
in a Subcommittee-requested Congressional Research Service 
questionnaire assessing the use of remote sensing--observation 
of areas of land and water by airplane or satellite--by Federal 
non-military agencies.
    2. The following reports were issued or requested by the 
General Accounting Office (GAO) at the request of the Chairman 
and/or Ranking Member of the Subcommittee on International 
Security, Proliferation, and Federal Services:

       Human Capital: The Role of Ombudsmen in Dispute 
Resolution, GAO-01-446 (April 2001).
       Managing for Results: Human Capital Management 
Discussions in Fiscal Year 2001 Performance Plans, GAO-01-236 
(April 2001).
       U.S. Postal Service: Information on Retirement Plans, 
GAO-02-170 (December 2001).
       U.S. Postal Service: Deteriorating Financial Outlook 
Increases Need for Transformation, GAO-02-355 (February 2002).
       Results-Oriented Cultures, Insights for U.S. Agencies 
from Other Countries' Performance Management Initiatives, GAO-
02-862 (August 2002).
       Hazard Mitigation: Proposed Changes to FEMA's 
Multihazard Mitigation Programs Present Challenges, GAO-02-1035 
(September 2002).
       U.S. Postal Service: Opportunities to Strengthen 
Information Technology Investment Management Capabilities, GAO-
03-3 (October 2002).
       Use of Human Capital Flexibilities in Selected Federal 
Agencies GAO-03-02 (December 2002)
       Federal Employees' Health Plans: Premium Growth and 
OPM's Role in Negotiating
       Benefits, GAO-03-236 (December 2002).
       U.S. Postal Facilities Physical Security, (Expected 
completion March 12, 2004).
       Effective Workforce Planning Practices in Federal 
Agencies, (Expected completion December 15, 2003).
       Ballistic Missile Defense Technology Readiness Levels, 
(GAO-03-600, August 2003).
       Security of Russian Weapons of Mass Destruction, (GAO-
03-482, March 2003).
       Nonproliferation of Radioactive Sources Abroad, (GAO-03-
638, May 2003).
       Domestic Efforts to Strengthen Controls over 
Radiological Sources, (GAO-03-483, April 2003).
       Review of the Implementation of the Revised Statistical 
Policy Directive Number 15, Race and Ethnicity Standards for 
Federal Statistical Agencies and Administrative Reporting.

                  OVERSIGHT OF GOVERNMENT MANAGEMENT,


               RESTRUCTURING AND THE DISTRICT OF COLUMBIA


                              SUBCOMMITTEE


                     Chairman: George V. Voinovich


               Ranking Minority Member: Richard J. Durbin


                              I. Hearings

    The Subcommittee on Oversight of Government Management, 
Restructuring and the District of Columbia held the following 
hearings during the 107th Congress, the first four of which 
were conducted under the chairmanship of Senator George V. 
Voinovich:

1. High-Risk: Human Capital in the Federal Government (February 1, 
        2001)

    This hearing examined the January 2001 decision by the U.S. 
General Accounting Office (GAO) to designate strategic human 
capital management as a government-wide ``high risk.'' Since 
1990, GAO has periodically reported on ``high-risk'' government 
operations that it has identified as vulnerable to waste, 
fraud, abuse, and mismanagement. GAO has determined that the 
government's approach to managing its people (``human capital 
assets'') is the critical missing link in reforming and 
modernizing the Federal Government's management practices. The 
combined effect of skills imbalances, succession planning 
challenges, outdated performance management systems, and 
staffing shortages places the ability of Federal agencies to 
accomplish their missions at risk.
    Witness: Hon. David M. Walker, Comptroller General of the 
United States, and Chief Executive Officer, U.S. General 
Accounting Office.
    Mr. Walker explained that after a decade of government 
downsizing and curtailed investments in human capital, it is 
becoming increasingly clear that the Federal Government's human 
capital strategies are inadequate to meet the needs of the 
government and its citizens in the most effective, efficient, 
and economical manner. He described the transformation needed 
to establish an organizational culture within government that 
promotes high performance and accountability, noting GAO's 
opinion that the Federal Government has often acted as if 
people were costs to be cut rather than assets to be valued. 
Mr. Walker outlined several administrative and legislative 
solutions to the crisis. He suggested the need to consider 
modern performance management and incentive approaches and 
discussed the importance of focusing on people as a strategic 
asset. In addition, Mr. Walker emphasized the roles of the 
Office of Management and Budget, the Office of Personnel 
Management, and the Congress in the management and oversight of 
human capital.

2. Assessing the District of Columbia Metropolitan Police Department's 
        Year 2000 Performance (March 22, 2001)

    The Subcommittee assessed the District of Columbia 
Metropolitan Police Department's achievement of its year 2000 
performance goals. In keeping with the Subcommittee's oversight 
of the implementation of the District's performance management 
system, the Subcommittee selected the police department as a 
case study to assess the District's progress.
    Witnesses: John A. Koskinen, City Administrator of the 
District of Columbia; Margret Nedelkoff Kellems, Deputy Mayor 
for Public Safety and Justice, District of Columbia; and 
Charles H. Ramsey, Chief of Police, District of Columbia 
Metropolitan Police Department.
    Mr. Koskinen discussed the District's effort to improve the 
delivery of municipal services with the creation and 
implementation of a performance management system. He spoke 
positively about the establishment of goals to measure and 
track agencies' performance. Ms. Kellems attested to the 
accomplishments of Chief Ramsey, particularly community-
oriented policing and its impact on crime reduction. She 
described how he achieved his performance goals and made 
advancements in community relations and outreach efforts. Chief 
Ramsey addressed the specific goals of the fiscal year 2000 
performance accountability plan and described how the 
Department accomplished them. Of particular note was Chief 
Ramsey's efforts to make the Metropolitan Police Department 
more visible and responsive to the public.

3. The National Security Implications of the Human Capital Crisis 
        (March 29, 2001)

    This hearing, the eighth since January 1999 focusing on the 
human capital management challenge facing the Federal 
workforce, examined how the current and future loss of human 
capital from government agencies is affecting and endangering 
our national security establishment and the ability of the 
Federal Government to defend our Nation and its interests 
around the world. The hearing, held jointly with the 
Subcommittee on Civil Service and Agency Organization of the 
House of Representatives Committee on Government Reform, 
considered the extent to which the Department of Defense has 
and uses flexibilities in managing its civilian workforce.
    Witnesses: Hon. James R. Schlesinger, Commissioner, on 
behalf of the U.S. Commission on National Security/21st 
Century, accompanied by Admiral Harry D. Train, USN-Ret., 
Commissioner, on behalf of the U.S. Commission on National 
Security/21st Century; Henry L. Hinton, Jr., Managing Director, 
Defense Capabilities and Management, U.S. General Accounting 
Office; and Robert J. Lieberman, Deputy Inspector General, 
Department of Defense.
    Mr. Schlesinger and Admiral Train discussed the findings of 
the Commission on National Security/21st Century review of U.S. 
national security and addressed such critical areas as 
contracting oversight, Presidential appointments, and 
recruitment and retention in the Foreign Service, civil 
service, and military personnel. Mr. Hinton discussed GAO's 
evaluation of the Departments of Defense and State, noting that 
while both departments have taken some action, much more 
remains to be done to institute an overarching framework within 
which future strategic workforce planning is conducted. Mr. 
Lieberman provided an overview of previous audit and inspection 
reports which address human capital challenges facing the 
Department of Defense, most notably in the acquisition 
workforce. Overall recommendations encompassed sweeping policy 
reforms that would institute strategic planning to improve 
recruiting, managing, and oversight of the Federal Government's 
human capital.

4. The Outlook for the District of Columbia Government: The Post-
        Control Board Period (June 8, 2001)

    This hearing, held jointly with the Subcommittee on the 
District of Columbia of the House of Representatives Committee 
on Government Reform, sought to gain an understanding of the 
progress made by the District of Columbia government during the 
period under which responsibilities for the District's 
governance were under the District of Columbia Management 
Assistance Authority (also known as the ``Control Board''). The 
Control Board was established by Congress and President Clinton 
on April 17, 1995 (P.L. 104-8) to address the fiscal and 
governance crisis facing the District of Columbia during the 
1990s. At the time of this hearing, the District had achieved 
four consecutive balanced budgets and was anticipating the 
disbanding of the Control Board on September 30, 2001. The 
hearing focused on the District's accomplishments in addressing 
the financial and management challenges that led to the control 
period, and on the appropriate financial and management 
oversight mechanisms that should be in place during the post-
control period to ensure that the financial and management 
stability and progress continues.
    Witnesses: Natwar M. Gandhi, Chief Financial Officer, 
District of Columbia; Charles C. Maddox, Inspector General, 
District of Columbia; Joshua S. Wyner, Executive Director, D.C. 
Appleseed Center; Renee Boicourt, Managing Director, Moody's 
Investors Service; and Parry Young, Director, Public Finance 
Department, Standard & Poor's; Hon. Alice Rivlin, Chair, 
Financial Control Board; Hon. Anthony Williams, Mayor, District 
of Columbia; Hon. Linda W. Cropp, Chair, Council of the 
District of Columbia; and J. Christopher Mihm, Director, 
Strategic Issues, U.S. General Accounting Office;
    Mayor Williams testified on behalf of himself, Dr. Rivlin, 
and Ms. Cropp, stating the District has achieved a balanced 
budget and has met the statutory requirements since the control 
period was instituted. Mayor Williams also discussed developing 
an exit strategy that would include continuing the position of 
Chief Financial Officer (CFO), preserving the autonomy of the 
CFO, and retaining budget officials in the Executive and 
Legislative Branches of the District for transparency. Mr. Mihm 
recommended establishing an audit committee and suggested that 
Congress may wish to specifically require the District to 
notify Congress if certain predefined reportable events (such 
as default on borrowing or failing to meet payroll) occur that 
require the prompt attention of the District and Congress.
    Mr. Gandhi urged the importance of an independent and 
insulated CFO who develops and certifies financial data within 
the District government. Mr. Maddox testified that the 
Inspector General will continue to help foster accountability 
and integrity by auditing the District government. Mr. Wyner 
suggested having the District CFO act as the Treasurer and 
Controller with a renewable 4-year term, direct control over 
his personnel, and a role in certifying fiscal impact 
statements and legislation. Ms. Boicourt testified that the 
credit condition of the District is four ratings higher than it 
was in 1995 due to the substantial improvement in the 
District's finances and economy. Ms. Boicourt emphasized the 
need for the District to continue to improve its public 
services and management information. Mr. Young testified that 
the District's investment rating is BBB+ on a scale of AAA to 
D, emphasizing that the Control Board Act and the 1997 National 
Capital Revitalization Act, along with strengthening economic 
conditions, were significant factors in the District's improved 
financial and administrative position.

5. Finding a Cure to Keep Nurses on the Job: The Federal Government's 
        Role in Retaining Nurses for Delivery of Federally-Funded 
        Health Care Services (June 27, 2001)

    This hearing examined the root causes of nursing staff 
shortages and the threat such shortages pose to the quality and 
cost containment of federally funded health care and long-term 
care programs, including Medicare, Medicaid, Veterans and 
Defense health. Experts and practitioners shared their 
experiences about the impact of staffing shortages on delivery 
of services to beneficiaries under Federal programs. The 
hearing probed how the Federal Government and others are, or 
should be, responding to, coordinating, and addressing this 
problem.
    Witnesses: Rachel Weinstein, R.N., Director, Clinical 
Standards Group, Office of Clinical Standards and Quality, 
Centers for Medicare and Medicaid Services, U.S. Department of 
Health and Human Services, accompanied by Thomas Hoyer, 
Director, Chronic Care Purchasing Policy Group; Denise H. 
Geolot, Ph.D., R.N., FAAN, Director, Division of Nursing, 
Bureau of Health Professions, Health Resources and Services 
Administration, U.S. Department of Health and Human Services 
(HHS); Kathleen L. Martin, Rear Admiral, Director, Navy Nurse 
Corps, U.S. Navy; Janet Heinrich, Director, Health Care--Public 
Health Issues, U.S. General Accounting Office; Ann O'Sullivan, 
MSN, R.N., President, Illinois Nurses Association, on behalf of 
the American Nurses Association; Gary A. Mecklenburg, President 
and Chief Executive Officer, Northwestern Memorial Hospital, 
Chicago, on behalf of the American Hospital Association; Carol 
Anne Bragg, R.N., President, SEIU Local 1998, the Professional 
Staff Nurses Association in Maryland, and a member of SEIU's 
Nurse Alliance; Hon. Lynn Martin, Chair, Panel on ``Future of 
the Health Care Labor Force in a Graying Society,'' accompanied 
by Mary Jo Snyder, Director of the Nursing Institute, 
University of Illinois-Chicago, College of Nursing; and J. 
David Cox, R.N., Vice President, National Veterans Affairs 
Council for the American Federation of Government Employees 
(AFGE), AFL-CIO.
    Ms. Weinstein emphasized the commitment of HHS to provide 
adequate and appropriate pay to health care providers. She also 
stated that HHS is analyzing how to best ensure that Medicare 
and Medicaid recipients receive appropriate compensation for 
nursing homes and facilities and that staffing levels are 
appropriate. Dr. Geolot projected that, with our aging 
population, including the number of nurses nearing retirement 
age, the United States faces a severe shortage of nurses unless 
more individuals are brought into the profession within the 
decade. She recommended that student loan programs for nurses 
be continued and improved. Admiral Martin testified that the 
military is also facing nursing shortages in its enlisted 
ranks, reserves, civil service, and contract positions and 
encouraged increasing compensation for nurses to help recruit 
new personnel.
    Ms. Heinrich noted that the demand for nurses is shifting 
outside of hospitals, increasing the need for nurses. She 
observed that inadequate staffing, heavy workloads, mandatory 
overtime, and the need for increased compensation has resulted 
in growing job dissatisfaction among nursing professionals. Ms. 
O'Sullivan shared her concerns that managed care and Medicare 
changes led to cost containment programs decreasing the number 
of nurses on the job. Mr. Mecklenburg testified that 75 percent 
of vacant positions in hospitals are for nurses. He contended 
that there is a nursing shortage because nurses are retiring at 
a higher rate, fewer people are entering nursing school, and 
the number of patients needing care is increasing. Ms. Bragg 
testified that nurses are leaving hospitals due to a 
deteriorating work environment, staffing shortages, and abuse 
of mandatory overtime. Ms. Martin recommended the need for long 
term solutions to address the problems of nursing, including 
improved wages and benefits, improved working environments, 
best management practices from the private sector, and a public 
commission to study how to encourage people to enter the 
nursing profession. Mr. Cox described how Veterans 
Administration hospitals have cut nurses by 10 percent and 
nurses assistants by 30 percent. He argued that nurses are 
overworked, have too many patients, and must work mandatory 
overtime, leading to angry or upset patients, or worse, medical 
errors.

6. Expanding Flexible Personnel Systems Governmentwide (July 17, 2001)

     This hearing focused on the various personnel 
flexibilities and special authorities granted by Congress to 
specific government agencies to facilitate personnel retention, 
recruitment, pay and promotion. This hearing built on the 
foundation established in a series of hearings held by the 
Subcommittee in the 106th Congress to address the Federal 
Government's human capital challenges. The hearing showcased 
three agencies, the General Accounting Office, the Internal 
Revenue Service, and the Department of Defense, and considered 
whether Congressional enactments granting these entities 
certain personnel flexibilities had been useful and effective. 
The hearing sought to identify lessons other agencies and 
Congress could learn from the practical experiences of the 
three agencies highlighted, including whether these 
flexibilities should be extended more broadly.
    Witnesses: Hon. David M. Walker, Comptroller General, U.S. 
General Accounting Office; Hon. Sean O'Keefe, Deputy Director, 
Office of Management and Budget; Hon. Charles O. Rossotti, 
Commissioner, Internal Revenue Service; Hon. Charles S. Abell, 
Assistant Secretary of Defense for Force Management Policy, 
Department of Defense; Bobby L. Harnage, Sr., National 
President, American Federation of Government Employee (AFGE), 
AFL-CIO; Susan L. Shaw, Deputy Director of Legislation, 
National Treasury Employees Union (NTEU); and Myra Howze 
Shiplett, Director, Center for Human Resources Management, 
National Academy of Public Administration.
    Mr. Walker emphasized the importance of a strategic 
approach to human capital management, one which is linked to 
the agency's strategic plan, core values, and organizational 
alignment. He also explained the initiatives GAO itself had 
undertaken to enhance its value by better management of human 
capital, and how other agencies may benefit from best practices 
and GAO's self-assessment checklist. Mr. O'Keefe stressed the 
importance of human capital to the President and his desire to 
use the current flexibilities more effectively, while at the 
same time looking to update the personnel system to modernize 
performance incentives. Mr. Rossotti shared his experience in 
implementing the Internal Revenue Service Restructuring and 
Reform Act of 1998 (P.L. 105-205), including critical pay to 
attract senior managers, streamlined hiring, travel, and 
relocation procedures and a broadbanded pay system. Mr. Abell 
discussed the personnel flexibilities and demonstration 
projects in place at the Department of Defense for the civilian 
workforce.
    Mr. Harnage advocated four broad policy changes to address 
the Federal Government's human capital crisis: Providing 
comparable and competitive compensation; eliminating arbitrary 
personnel ceilings; ending the practice of outsourcing and 
privatization; and enhancing the value and reputation of public 
service work. Ms. Kelley urged support for pay comparability 
for Federal employees with the private sector and increased use 
of recruitment and retention programs available under current 
law. Ms. Shiplett encouraged increasing flexibility, adding 
more demonstration projects and opening up demonstration 
projects that are successful to other agencies and departments 
who may wish to incorporate them.

7. Who Cares for the Caregivers?: The Role of Health Insurance in 
        Promoting Quality Care for Seniors, Children, and Individuals 
        with Disabilities (July 24, 2001)

    This hearing examined health insurance for the over two 
million caregivers who provide professional care services for 
our Nation's seniors, children, and individuals with 
disabilities. The Federal Government sponsors a wide variety of 
caregiving programs either directly or through subsidies. Many 
of these important caregivers receive low pay and lack 
insurance to cover their own health care needs or the health 
care needs of their dependents. This combination of low pay and 
lack of health benefits has resulted in a high turnover rate in 
the caregiving profession, posing a threat to the quality of 
our Nation's care treatment and facilities. Reform options to 
address this situation were reviewed, including Medicaid 
expansion, enrollment in State and local employees' health 
insurance programs, and subsidized private health insurance.
    Witnesses: Jane Hayward, Deputy Director, Rhode Island 
Department of Health and Human Services; Suzanne Mintz, 
President and Co-Founder, National Family Caregivers 
Association; James Stearns, Esq., Past President and Current 
Board Member, United Cerebral Palsy Association; Yolanda Sims, 
Hope School for the Developmentally Disabled Children, 
Springfield, Illinois, on behalf of the American Federation of 
State, County, and Municipal Employees; D.J. (Sam) Chapman, 
Chief Nursing Administrator, Bureau for Children with Medical 
Handicaps, Ohio Department of Health and National Secretary, 
National Association of Home Care; and Mardell Bell, Local 
#880, Service Employees International Union, Dolton, Illinois.
    Ms. Hayward described the health care system in Rhode 
Island, which provides health care to family care providers who 
are licensed by the State. Ms. Mintz testified regarding the 
plight of family caregivers, who spend an average of 18 to 20 
hours per week caring for an elderly or disabled family member 
without compensation. Mr. Stearns discussed providing funding 
through Medicare and Medicaid to allow persons requiring direct 
support attendants to employ and provide health insurance for 
them. Ms. Sims shared her personal experiences with the high 
costs associated with being a caregiver, including health 
insurance expenses, even with the benefit of employer-provided 
plans. Ms. Chapman commented on management difficulties facing 
caregiver agencies, including challenges of retaining 
employees, providing benefits, and covering business costs. She 
urged that financing for caregivers be made available through 
Medicare or Medicaid, which would relieve agencies from having 
to choose between salary increases or health benefits. Ms. Bell 
discussed her experience as a healthcare worker without health 
insurance and the importance of expanding demonstration 
projects that provide living wages and health benefits to 
caregivers.

8. Food Safety and Security: Can Our Fractured Food Safety System Rise 
        to the Challenge? (October 10, 2001)

    This hearing, a followup to two hearings held by the 
Subcommittee in the 106th Congress, probed the current 
fragmented structure of Federal food safety oversight to 
determine whether it can adequately protect the American public 
from possible food hazards. Following the events of September 
11, 2001, Americans are more keenly focused on how varied 
aspects of homeland security, including our Nation's food 
supply, may be vulnerable to attack. This hearing examined 
weaknesses in our existing food safety system with divided and 
duplicative responsibilities of multiple agencies. The hearing 
explored how a single food safety agency, based on science, 
could promote greater accountability, maximize limited 
resources, and ensure greater public confidence in the safety 
of our food system.
    Witnesses: Hon. Rosa L. DeLauro, U.S. House of 
Representatives, Connecticut, 3rd District; Robert A. Robinson, 
Managing Director, Natural Resources and the Environment, U.S. 
General Accounting Office, accompanied by Keith W. Oleson, 
Assistant Director, Natural Resources and the Environment, U.S. 
General Accounting Office; Hon. Elsa Murano, Ph.D., Under 
Secretary of Agriculture for Food Safety, U.S. Department of 
Agriculture; Bernard Schwetz, Ph.D., D.V.M., Acting Principal 
Deputy Commissioner, Food and Drug Administration, U.S. 
Department of Health and Human Services, accompanied by Joseph 
A. Levitt, Director, Center for Food Safety and Applied 
Nutrition, Food and Drug Administration, U.S. Department of 
Health and Human Services; Hon. Dan Glickman, Akin, Gump, 
Strauss, Hauer & Feld, L.L.P., former Secretary of Agriculture, 
U.S. Department of Agriculture (1995-2001); Michael F. 
Jacobson, Ph.D., Executive Director, Center for Science in the 
Public Interest (CSPI); John Cady, President and Chief 
Executive Officer, National Food Processors Association; Peter 
Chalk, Ph.D., Policy Analyst, RAND Corporation; C. Manly 
Molpus, President and Chief Executive Officer, Grocery 
Manufacturers of America; and Tim Hammonds, President and Chief 
Executive Officer, Food Marketing Institute.
    Congresswoman DeLauro discussed the Safe Food Act of 2001, 
legislation that would create a single agency responsible for 
all Federal food safety activities, which she introduced in the 
House of Representatives and Senator Durbin introduced in the 
Senate. Mr. Robinson renewed GAO's longstanding call for a 
single food safety agency responsible for implementing uniform 
and risk-based food safety laws. He emphasized that the present 
patchwork design hampers the government's efforts to address 
existing and emerging food safety threats, and leads to 
inconsistent oversight and inefficient, inflexible deployment 
of resources.
    Dr. Murano described how the food safety system is 
challenged by emerging pathogens, increased international 
trade, new foods in the marketplace, the growing segment of the 
population at greater risk of contracting food-borne illnesses, 
and gaps in education. She outlined the USDA food safety 
infrastructure of inspection, surveillance, research, and 
education. Dr. Schwetz explained FDA's jurisdiction over 80 
percent of domestic and imported foods marketed in interstate 
commerce. He stressed the need for a strong science-based 
system, an enhanced surveillance system, risk-based prevention 
standards, and adequate enforcement to meet the food safety 
challenges at the FDA. Mr. Glickman argued in support of a 
single food safety agency. He shared his belief that the 
current fragmented organization of the food safety system is 
flawed and that piecemeal approaches to reform will fall short. 
He stressed the need to improve the underlying food safety 
statutory authority and adopt an integrated regulatory 
structure to meet the challenges of terrorism.
    Dr. Jacobson shared his concerns about using old laws to 
regulate new hazards, with many gaps, inconsistencies, and 
inefficiencies in government oversight. He conveyed CSPI's 
support for legislation to establish a single, independent food 
safety agency and a cohesive, coherent food safety statute. Mr. 
Cady indicated that the objectives of legislation to create a 
single food safety agency could be achieved by better utilizing 
existing authorities, and that any reforms not weaken consumer 
confidence in the safety of our food supply. Dr. Chalk outlined 
his concerns that agriculture, which is critical to our 
country's economic, social, and political stability, needs to 
be part of infrastructure protection planning and investment. 
He indicated support for a single food safety agency which 
could streamline and rationalize oversight. Mr. Molpus endorsed 
the current system, explaining that allocation of 
responsibility among several agencies is logical and reflects 
the informed judgments of lawmakers and government officials. 
He argued that restructuring would be disruptive and difficult, 
but offered four recommendations: More food safety resources 
for the FDA, greater emphasis on science and research, a 
commitment to collaboration, coordination, and consultation 
among the varied agencies, and enhanced resources and tools to 
effectively regulate imported products. Mr. Hammonds testified 
that the current food safety system is ill-equipped to deal 
with new challenges, and that designating a single food safety 
agency is imperative to ensure coordination, avoid overlap, and 
better utilize limited resources.

9. Promoting the Best Interests of Children: Proposals to Establish a 
        Family Court in the District of Columbia Superior Court 
        (October 25, 2001)

    This hearing considered the components of S. 1382 and H.R. 
2657, legislation pending before the Subcommittee which sought 
to restructure the existing District of Columbia Superior Court 
family division to address concerns about how child abuse and 
neglect cases are handled within the Presidentially-appointed, 
federally-funded local court system. At the time of the 
hearing, more than 4,500 child abuse and neglect cases were 
spread among the Superior Court's 59 trial judges, and many 
children were remaining in foster care longer than Federal law 
dictating permanent placements requires. The hearing examined 
components of the reform bills, including such elements as 
placing all cases involving one family before one judge, 
assigning a cadre of magistrates to assist in the judicial 
function of the court, mandating minimum terms for service on 
the court, and transferring to the Family Court all child abuse 
and neglect cases dispersed throughout the court system. The 
hearing assessed varying perspectives on whether and how the 
proposed changes might impact the ability of the court to 
address the needs of some of the city's most fragile 
residents--victims of child abuse and neglect.
    Witnesses: Hon. Mike DeWine, U.S. Senator; Hon. Mary L. 
Landrieu, U.S. Senator; Hon. Tom DeLay, Majority Whip, U.S. 
House of Representatives; Hon. Eleanor Holmes Norton, U.S. 
House of Representatives; Hon. Rufus G. King III, Chief Judge, 
Superior Court of the District of Columbia, accompanied by Hon. 
Lee Satterfield, Presiding Judge, Family Division, Superior 
Court of the District of Columbia; Dr. Olivia Golden, Director, 
District of Columbia Child and Family Services Agency; Deborah 
Luxenberg, Chair, Children in the Courts Committee, Council for 
Court Excellence; and Margaret J. McKinney, Co-Chair, Family 
Law Section, District of Columbia Bar Association.
    Senator Landrieu explained that the bipartisan legislation 
she and Senator DeWine introduced was prompted by concerns 
arising from the deaths of over 200 children under the care of 
the District since 1987. She emphasized that the ``one family, 
one judge'' principle underlying the bill was grounded in 
extensive research about successful court restructuring efforts 
in other jurisdictions. Congresswoman Norton commented that in 
the course of development of the legislation, best practices 
from family courts across the country were evaluated and 
incorporated in the proposal, including ongoing training, 
alternative dispute resolution, and utilizing a one family/one 
judge policy. Congressman DeLay outlined three essential 
elements of reform: A one judge/one child policy; 5-year terms 
for judges, and case consolidation within the family court 
system. Senator DeWine focused his comments on the need to 
revamp the organization of the court to include sufficient 
numbers of qualified and experienced judges committed to serve 
sufficient terms in the family court, specialized training in 
family law for the judges, and improved compliance with the 
Adoption and Safe Families Act of 1997 (ASFA) (P.L. 105-89). 
Judge King described several administrative actions he had 
taken to address concerns about the handling of child welfare 
cases, including assigning an additional judge to the child 
abuse and neglect case docket, remodeling courtroom space, 
rearranging calendars, and specialized training on the 
requirements under the ASFA law. Judge King shared several 
concerns posed by the Congressional reform proposals. 
Specifically, he indicated that requiring all family law cases, 
not just abuse and neglect matters, be transferred into the 
proposed new court may be inappropriate. He also raised 
concerns that the proposals would dismantle a highly successful 
Domestic Violence Unit, mandate extensive judicial terms that 
may not be in the best interests of families, and micromanage 
the court in a way that would not permit necessary 
administrative flexibility.
    Ms. Golden recommended passing the bill to ensure that 
changes would coincide with reforms at the Child and Family 
Services Agency and provide a stronger legal support system for 
all elements of the family court system, including judges, 
lawyers, social workers, children, and parents. Ms. Luxenberg 
shared her belief that the family division lacks adequate 
resources, stressing that more funding is essential to achieve 
the goals of the proposed legislation. She also expressed 
concern about deferring implementation of the one child/one 
judge provision for 18 months, urging that all newly filed 
abuse and neglect cases should immediately follow the one 
child/one judge approach. Ms. McKinney stressed the importance 
of having attorneys with family law experience appointed to the 
Family Court bench, noting that historically this has not 
occurred. She recommended increased funding, that the court not 
be micromanaged, and that judicial term limits not be 
legislated.

10. Good Beginnings Last a Lifetime: How the Federal Government Can 
        Promote Affordable, Quality Child Care (January 28, 2002)

    This hearing was conducted as a field hearing at the 
Childgarden Child Development Center in St. Louis, Missouri and 
jointly chaired by Senators Dick Durbin and Jean Carnahan. The 
hearing was designed to identify ways that the Federal 
Government can assist families, employers, and child care 
providers in the search for affordable, quality child care. The 
hearing examined some of the challenges of providing affordable 
and quality child care in the bi-state St. Louis area. Problems 
encountered by parents, providers, and businesses in accessing 
child care as well as innovative programs that are working well 
were discussed.
    Witnesses: Lisa Eberle-Mayse, Director, Childgarden Child 
Development Center; Steve J. Cok, parent of children in day 
care; JoAnn Harris, parent of children in day care; Janice 
Moenster, parent of children in day care; Teresa M. Jenkins, 
Director, Office of Workforce Relations, U.S. Office of 
Personnel Management (OPM); Sarah Kirschner, Missouri Childcare 
at Work; Penny Korte, Daycare Owner/Director, P.A.L.S., 
Highland, Illinois; Corrine Patton, Manager, Missouri Child 
Care Resource and Referral Network; and Kim E. Hunt, Illinois 
Network of Child Care Resource and Referral Agencies (INCCRRA).
    Ms. Eberle-Mayse described effective ways to recruit and 
retain qualified child care providers, such as minimizing non-
salary expenses, fundraising, taking advantage of government 
programs, creating a supportive work environment, and investing 
in continuing education. Mr. Cok, Ms. Harris, and Ms. Moenster 
shared their personal experiences as working parents facing the 
challenge of finding affordable, quality child care. Ms. 
Jenkins outlined some of the successful initiatives launched by 
Federal agencies to provide child care assistance for their 
employees, and OPM's efforts to provide agencies with models 
for implementing child care subsidy programs. Ms. Kirschner 
explained her perspectives on how businesses are impacted by 
child care concerns and how successful programs such as 
Missouri Child Care at Work encourage businesses to provide on-
site child care for their employees. Ms. Korte emphasized the 
importance of providing daycare workers the requisite respect 
and compensation for the work they perform, and discussed how 
Federal assistance to help with recruitment and retention, 
health care and retirement programs, and tax benefits for 
working families could improve the circumstances facing parents 
today. Ms. Patton discussed how her agency coordinates child 
care resource and referral agencies and the importance of 
services which help parents make informed decisions and help 
providers, communities, and employers with technical assistance 
and other specialized initiatives. Ms. Hunt shared innovative 
practices and successful programs to improve access to high 
quality child care in communities throughout Illinois.

11. Illicit Diamonds, Conflict and Terrorism: The Role of U.S. Agencies 
        in Fighting the Conflict Diamond Trade (February 13, 2002)

    This hearing focused on efforts of U.S. Government agencies 
in fighting the conflict diamond trade. The mining and sales of 
diamonds by parties to armed conflicts, labeled ``conflict 
diamonds,'' make up an estimated 3.7 percent to 15 percent of 
the value of the global diamond trade. Conflict diamonds have 
fueled rebel violence and egregious human rights violations 
against civilian populations in countries such as Sierra Leone, 
Angola, and the Democratic Republic of the Congo. The hearing 
examined reports that conflict diamonds are being used by 
terrorists to launder money. The hearing also outlined progress 
in the ``Kimberley Process,'' which is a multilateral agreement 
to control the export and import of diamonds, specifically 
aimed at keeping conflict diamonds out of the marketplace.
    Witnesses: Hon. Russell Feingold, U.S. Senator; Hon. Mike 
DeWine, U.S. Senator; Hon. Judd Gregg, U.S. Senator; Hon. John 
E. Leigh, Ambassador of Sierra Leone to the United States; Hon. 
Joseph Melrose, former U.S. Ambassador to Sierra Leone; Loren 
Yager, Director, International Affairs and Trade, U.S. General 
Accounting Office; Alan Eastham, Special Negotiator for 
Conflict Diamonds, U.S. Department of State; Timothy Skud, 
Acting Deputy Assistant Secretary for Regulation, Tariff, and 
Trade Enforcement, U.S. Department of the Treasury; and James 
Mendenhall; Deputy General Counsel, U.S. Trade Representative.
    Senator Feingold discussed both the scourge of conflict 
that has been funded by the illicit diamond trade and the 
benefits and economic growth that the legitimate diamond trade 
can bring to developing countries. He called for long-term 
policy options so that weak states would no longer be 
attractive to criminals and terrorists as a base of operations. 
Senator DeWine described the deplorable impact that conflicts 
fueled by the illicit diamond trade have had on the children of 
Sierra Leone, particularly rape, mutilation, and kidnaping of 
children to serve in rebel armies. He also discussed the 
economic clout the United States has as a major diamond 
importer to stop the trade in conflict diamonds. Senator Gregg 
stressed the need for legislation to ensure conflict diamonds 
are not entering U.S. markets, and discussed past policies 
toward the Revolutionary United Front (RUF) in Sierra Leone. He 
pointed to the ways in which terrorist organizations use 
conflict diamonds to finance their activities. He also called 
for policy changes toward Liberia as essential for solving the 
conflict diamond problem.
    Ambassador Leigh discussed how conflict diamonds have 
allowed the RUF to terrorize the government and people of 
Sierra Leone. He distinguished the differences between conflict 
and contraband diamonds. He also testified that stopping the 
trade of illicit diamonds will help bring peace to Africa and 
hamper criminal and terrorist activity. Ambassador Melrose 
discussed many facets of the diamond trade in Sierra Leone, 
pointing out that diamonds are easy to obtain since they are 
panned, are ideal for laundering money, and that the government 
has lost its ability to control the movement of diamonds from 
the field to the market. He stressed the need to create a 
system for preventing illicit diamonds from entering the 
legitimate market.
    Mr. Yager discussed the structure of the diamond trade. He 
outlined the Kimberley Process and its lack of accountability; 
the nature of diamonds as a commodity and how non-transparent 
industry operations create opportunities for illicit trade; and 
ways the current system is inadequately designed for the 
detection of conflict diamonds. Mr. Eastham discussed the role 
of the U.S. Department of State in combating conflict diamonds 
through the United Nations and in negotiations as part of the 
Kimberley Process. He spoke about efforts the United States was 
taking to strengthen the Kimberley Process. Mr. Eastham also 
described the role of diamonds in financing terrorist 
activities by allowing terrorists to hoard wealth and avoid 
legitimate banking circles. Mr. Skud discussed the role of the 
U.S. Customs Service in enforcing diamond sanctions and the 
current import prohibitions on conflict diamonds. Mr. 
Mendenhall testified about current U.N. sanctions and possible 
conflicts between the Kimberley Process, which would regulate 
the rough diamond trade, and U.S. trade commitments under the 
World Trade Organization.

12. A License to Break the Law? Protecting the Integrity of Driver's 
        Licenses and State IDs (April 16, 2002)

    This hearing took a comprehensive look at problems relating 
to the availability and use of fake or fraudulently issued 
driver's licenses, with a particular focus on what the Federal 
and State Governments can do to improve the system. Enhancing 
the process by which driver's licenses are issued, and 
improving the security of the cards to make them counterfeit-
resistant, will not only assist in the domestic combat against 
terrorism, but can also help prevent underage individuals from 
purchasing alcohol and tobacco products, keep problem drivers 
off the streets, and provide law enforcement officials with 
tools to fight identity theft.
    Witnesses: Theodore W. Wern, Esq., Kirkland and Ellis, 
Chicago, Illinois; Mary Ann Viverette, Chief of Police, 
Gaithersburg, Maryland, on behalf of the International 
Association of Chiefs of Police; Richard J. Varn, Chief 
Information Officer, State of Iowa, on behalf of the National 
Governors Association; Hon. Barbara P. Allen, State Senator, 
Eighth District, Overland Park, Kansas; Betty L. Serian, Deputy 
Secretary for Safety Administration, Pennsylvania Department of 
Transportation, on behalf of the American Association of Motor 
Vehicle Administrators (AAMVA); Barry J. Goleman, Vice 
President, Public Sector, American Management Systems, Inc., 
and former President of AAMVA's information technology 
subsidiary, AAMVAnet; and J. Bradley Jansen, Deputy Director, 
Center for Technology Policy, Free Congress Foundation.
    Mr. Wern related his personal experience as a victim of 
identity theft, including the time-consuming process of 
clearing his name of huge debts and traffic offenses incurred 
by the person who stole his identity. Ms. Viverette explained 
the importance of accurate identity documents to law 
enforcement officials. She encouraged the Federal Government to 
establish uniform minimum standards for drivers' licenses and 
encouraged States to use a unique identifier and anti-
counterfeiting security device on State-issued cards. Mr. Varn 
recommended that the Federal Government support an electronic 
database to verify identity. Ms. Allen described her efforts to 
enact a State law in Kansas requiring Social Security numbers 
and a biometric identifier for obtaining drivers' licenses and 
issuance of temporary documents until an individual's identity 
is confirmed. Ms. Serian recommended Federal assistance to 
States to help establish minimum standards for license 
issuance, help State motor vehicle departments to identify 
fraudulent documents, create an interstate driving record 
database, and increase penalties for identity fraud. Mr. 
Goleman, a former driver's license examiner in California, 
recommended the Federal-State cooperative effort to implement 
the Commercial Motor Vehicle Safety Act as a model to stop 
counterfeiting of State licenses. He also discussed the 
benefits of using biometrics and ``smart cards'' in tandem with 
improved verification technologies to reduce identification 
fraud. Mr. Jansen stated his strong opposition to any effort to 
create a national identification card, contending that it would 
limit privacy, freedom, and make identity fraud cases more 
difficult to solve.

13. Vital Assets: Human Capital in Federal Economic Regulatory Systems 
        (April 23, 2002)

    This hearing continued the Subcommittee's inquiry into the 
human capital challenge by examining the problem in the context 
of how well our country's economic regulatory agencies are 
equipped to accomplish their missions. In January 2001, the 
General Accounting Office released its report ``High-Risk 
Series: An Update,'' which stated that ``(a) lack of sufficient 
numbers of experienced staff with the right expertise limits 
the ability of Commerce and two other trade agencies to monitor 
and enforce trade agreements.'' Furthermore, the collapse of 
Enron Corporation raised the question of whether our government 
has the adequate staff to monitor the publicly traded companies 
which form the foundation of our financial markets and economy. 
The hearing showcased staff recruitment, selection, retention, 
and training at the Securities and Exchange Commission (SEC), 
the Commerce Department's International Trade Administration 
(ITA), and the Office of the U.S. Trade Representative (USTR).
    Witnesses: Loren Yager, Director, International Affairs and 
Trade, U.S. General Accounting Office; Richard Hillman, 
Director of Financial Markets and Community Investment, U.S. 
General Accounting Office; Grant Aldonas, Under Secretary for 
International Trade and Head, International Trade 
Administration, U.S. Department of Commerce; James M. 
McConnell, Executive Director, U.S. Securities and Exchange 
Commission (SEC); Edward L. Blansitt, Deputy Inspector General, 
U.S. Department of Commerce; Troy Cribb, Trade Counsel, Steptoe 
and Johnson, L.L.P.; and Lynn Turner, Professor of Accounting, 
Center for Quality Financial Reporting, Colorado State 
University.
    Mr. Yager discussed the GAO study of human capital at the 
Department of Commerce, Department of Agriculture, and the 
Office of the United States Trade Representative (USTR). He 
identified increased workloads, as well as recruitment and 
retention of trade experts and attorneys, as problems that need 
to be addressed by all agencies. Mr. Hillman described the huge 
increase in the SEC's workload over the past decade, 
concomitant with staffing losses during the same period. Mr. 
Aldonas described the growing demands at the International 
Trade Administration (ITA) for analysis and enforcement in its 
supportive role for USTR in negotiation, implementation, and 
dispute resolution of trade agreements. He noted the ITA 
continues to work to meet the goals set forth in previous GAO 
recommendations through management and administrative tools. 
Mr. McConnell explained how the enactment of pay parity will 
improve the SEC's ability to recruit and retain a talented and 
experienced staff, particularly as the Commission faces 
increasingly more complex issues as new technologies, 
participants, and financial products reshape our markets. Mr. 
Blansitt discussed the Department of Commerce's identification 
of the need to boost international compliance with trade 
agreements and expand market access for American exporters as 
vital issues facing the ITA. Mr. Blansitt outlined actions 
taken within the Trade Compliance Center, including development 
of a trade compliance manual to provide guidance for all ITA 
staff and use of performance measures to assess effectiveness 
and enhance ITA's efforts.
    Ms. Cribb emphasized the growing complexity of trade 
issues, and the importance of trained staff to handle 
complicated health and safety, transportation, and 
telecommunications issues. She also recommended upgrading 
technology and encouraged staff rotation as a way to boost 
interest and knowledge, while maintaining needed expertise. Mr. 
Turner shared his perspectives that human capital problems 
facing the SEC are the result of budget constraints keeping 
staffing at low levels during a booming market, low pay leading 
to high turnover rates, and low morale because SEC attorneys 
face opponents with greater access to resources. He stressed 
that in addition to human capital assets, the SEC needs tools 
and resources, including automated management information 
systems and improved training, to fulfill its mission.

14. Kids and Cafeterias: How Safe Are Federal School Lunches? (April 
        30, 2002)

    The hearing, conducted jointly with the House of 
Representatives Government Reform Subcommittee on Government 
Efficiency, Financial Management, and Intergovernmental 
Relations, examined the adequacy of government oversight of the 
Federal school lunch program. The hearing considered how 
managerial and organizational deficiencies may be adversely 
affecting the health of school children. As the Chicago Tribune 
reported in December 2001, there has been a 56 percent increase 
from 1990-1997 in the number of outbreaks of illness from 
school lunches. Distribution companies ship frozen school 
entrees quickly throughout the United States and multi-state 
cafeteria management contractors put them on menus in multiple 
cities simultaneously, too often giving children instant access 
to unsafe meals. A complex tapestry of food safety agencies 
often do not share information with each other and rarely tell 
schools when plants are cited or shut down for health 
violations. The result of this system is sick children in our 
Nation's schools.
    Witnesses: Hon. Rosa L. DeLauro, U.S. House of 
Representatives, 3rd District, Connecticut; Lawrence J. 
Dyckman, Director, Natural Resources and Environment, U.S. 
General Accounting Office; Lester M. Crawford, D.V.M., Ph.D., 
Deputy Commissioner, Food and Drug Administration (FDA), U.S. 
Department of Health and Human Services; Hon. Elsa Murano, 
Ph.D., Under Secretary of Agriculture for Food Safety, U.S. 
Department of Agriculture (USDA); Caroline Smith DeWaal, 
Director of Food Safety, Center for Science in the Public 
Interest; Sue Doneth of Marshall, Michigan, on behalf of Safe 
Tables Our Priority (STOP); John Bode, Counsel, National Food 
Processors Association; Cheryl Roberts, Comer, Georgia, on 
behalf of Safe Tables Our Priority (STOP), accompanied by Tyler 
Roberts; and Mary Klatko, Administrator, Food and Nutrition 
Service, Howard County Public Schools, Howard County Maryland, 
on behalf of the American School Food Service Association.
    Congresswoman DeLauro outlined her concerns about ensuring 
the safety of food in the Federal School Lunch Program under 
the current system and urged passage of legislation to 
establish a single agency responsible for food safety which she 
introduced in the House and which Senator Durbin introduced in 
the Senate. Mr. Dyckman shared statistics about the extent of 
the problem, specifically that each year 76 million people 
suffer food borne illness, 325,000 of whom are hospitalized, 
and 5,000 of whom die. He recommended revising the school food 
service manual to include guidance regarding safety provisions 
for procurement contracts, ensuring that State and local 
officials have access to inspection and compliance records of 
food suppliers, and sharing recall information of USDA donated 
foods with State and local officials if there is a safety 
concern. Dr. Crawford explained FDA's role in promoting food 
safety from research to outbreak response to education for 
consumers, health officials, and industry. He also noted FDA 
oversees 80 percent of domestic and imported foods; including 
where the food is produced, processed, packaged, stored, or 
sold. Dr. Murano stated that when a commodity purchased by USDA 
is flagged as a safety concern all appropriate agencies are 
notified, an investigation is launched, and the food in 
question is held. She also commented that schools contract 83 
percent of their school lunch food and must make sure their 
processors and distributors meet school standards for safety.
    Ms. DeWaal described three gaps in the food safety system: 
Outbreak recognition, outbreak response, and outbreak 
prevention. She encouraged the FDA and USDA to increase their 
resources for inspections and require more tests of ground meat 
sold to the school lunch program, and urged Congress to create 
a single food safety agency. Ms. Doneth explained the suffering 
her family experienced after her daughter contracted Hepatitis-
A after eating frozen strawberries in her school lunch and 
later when another daughter consumed food infected with E. Coli 
0157:H7. Mr. Bode testified that he did not support recall 
authority for FDA and USDA because the food industry has 
consistently cooperated in recalls, that a mandatory recall 
would have to be done with due process, and that questions 
about responsibility for an inappropriate recall were 
unresolved. Mr. Bode also discouraged creation of a single food 
agency noting the regulatory system and culture of the agency 
would not be fundamentally different and would not improve 
coordination with State and local officials which he argued are 
vital to more effective recalls. Ms. Roberts described her 
son's experience after contracting E. Coli 0157:H7 from a 
hamburger he ate at school. She stressed the need for local 
health officials and the media to report the causes of food 
borne illness outbreaks.

15. Tobacco's Deadly Secret: The Impact of Tobacco Marketing on Women 
        and Girls (May 14, 2002)

    This hearing focused on the impact of smoking on the health 
of women and girls, particularly the role of tobacco 
advertising on smoking initiation among women and girls. The 
hearing probed what can and should be done to address the 
epidemic of smoking-related disease in women, including efforts 
that the Federal Government is or should be undertaking. The 
U.S. Surgeon General issued a report in 2001 highlighting the 
health impact of smoking on women and girls, including that 
women now account for 39 percent of all smoking-related deaths 
in the United States, more than double the level in 1965. Lung 
cancer is the leading cause of cancer death among women, 
surpassing breast cancer in 1987. Meanwhile, increased 
marketing by tobacco companies has stalled progress in smoking 
cessation by women and spurred recent increases in smoking 
among teenage girls.
    Witnesses: Cassandra Coleman, and her daughter, Nzingha 
Coleman, Chicago, Illinois; Elizabeth Whelan, Sc.D., MA, MPH, 
President, American Council on Science and Health, New York, 
New York; Charles King, III, J.D., Ph.D, Assistant Professor, 
Harvard Business School, Boston, Massachusetts; Cristina Beato, 
M.D., Deputy Assistant Secretary for Health, U.S. Department of 
Health and Human Services; Diane E. Stover, M.D., FCCP, Head, 
Division of General Medicine, Chief, Pulmonary Service, 
Memorial Sloan-Kettering Cancer Center, New York, New York, on 
behalf of the American College of Chest Physicians; and Matthew 
L. Myers, President, Campaign for Tobacco-Free Kids.
    Ms. Coleman discussed her struggle to quit smoking after 25 
years after the realization that her smoking caused her two 
children to develop asthma and leaky heart valves. Nzingha 
Coleman shared her observations about smoking-related health 
problems and commented on the young age at which some girls 
start smoking. Dr. Whelan shared the results of the American 
Council on Science and Health's most recent survey of tobacco 
advertising in women's magazines, noting findings that 
magazines which do not accept tobacco ads also have the most 
information about the health risks of tobacco usage. Dr. King 
discussed the findings of his study published in the New 
England Journal of Medicine, documenting trends in tobacco 
company advertising in magazines with a youth readership and 
the effectiveness of this kind of advertising. Dr. Beato 
testified regarding the Surgeon General's report about patterns 
of tobacco use among women and girls, including when and why 
girls start smoking, what factors influence smoking, and the 
role tobacco marketing plays in influencing girls to start 
smoking. Dr. Stover described specific health problems that 
smoking causes in women including menstrual irregularity, 
infertility, and early menopause. Mr. Myers advocated the need 
for a Federal policy to address the smoking epidemic among 
women and girls, including encouraging the Food and Drug 
Administration and the Center for Medicare and Medicaid 
Services to take more active roles to protect the health of 
women.

16. Half a Loaf--The Impact of Excluding Surplus Commodities from 
        America's Response to Global Hunger (June 4, 2002)

    The hearing examined the structure, scope and effectiveness 
of U.S. food aid programs and the likely impact of legislative 
and administrative changes under consideration. The 
administration's FY 2003 budget proposal contained an overall 
reduction of some $300 million in U.S. food aid budgets, 
eliminated surplus commodity donations, sharply reduced 
monetization of commodities and requested no funding for the 
``global school lunch'' initiative launched in 2000. It also 
reorganized and consolidated oversight responsibilities between 
the U.S. Agency for International Development and the U.S. 
Department of Agriculture. Taken together, these steps have 
significant implications for the government's partner 
organizations and the hungry populations they help feed.
    Witnesses: Hon. George McGovern, former U.S. Senator, and 
former U.S. Ambassador to the Food and Agriculture 
Organization; Hon. James P. McGovern, U.S. House of 
Representatives, 3rd District, Massachusetts; Loren Yager, 
Director, International Affairs and Trade Group, U.S. General 
Accounting Office; Hon. A. Ellen Terpstra, Administrator, 
Foreign Agricultural Service, U.S. Department of Agriculture 
(USDA); Hon. Roger Winter, Assistant Administrator, Bureau of 
Democracy, Conflict and Humanitarian Assistance, U.S. Agency 
for International Development (USAID); Ellen S. Levinson, 
Executive Director, Coalition for Food Aid; and Jason Phillips, 
Country Director, International Rescue Committee, Kenya.
    Senator McGovern described the growing problem of world 
hunger with millions of hungry children, and the positive 
impact that United Nations-sponsored school food programs have 
had on boosting enrollment in schools, especially among girls. 
He emphasized the importance of U.S. leadership and 
Congressional funding for global hunger relief programs. 
Congressman McGovern testified how U.S. food aid programs have 
led to increased sales of U.S. agricultural products and have 
helped encourage economic growth and development in the 
countries receiving aid. He stressed the importance of using 
surplus commodities to combat global hunger and attack poverty, 
illiteracy, and lack of economic opportunity.
    Mr. Yager discussed management and operation of U.S. food 
aid programs including why aid fluctuates year to year, the six 
different food aid programs administered by two different 
Federal agencies which deliver food aid, and management of food 
aid programs. Ms. Terpstra described USDA's comprehensive 
review in 2001 of U.S. foreign food aid programs, noting that 
it uncovered concerns that the number of programs and 
administering agencies has resulted in inefficiencies and that 
expanded use of surplus commodities has led to uncertainties 
about future food availability on both recipient countries and 
distributing agencies. She outlined the steps the 
administration was undertaking to reduce chronic world hunger 
and promote economic security. Mr. Winter emphasized USAID's 
active participation and concurrence in the food aid review, 
noting that program changes and realignment should improve the 
ability to manage the programs.
    Ms. Levinson expressed her organization's concerns about 
the food aid review and that the recently passed farm bill 
legislation will eliminate nearly all surplus donations. She 
argued that decisions to use half of all international food aid 
for emergencies will not reduce chronic hunger and 
undernourishment problems, and that 800,000 metric tons of 
increased food aid will not adequately replace the two to six 
million metric tons of food aid that will be lost by 
eliminating surplus donations. Mr. Phillips shared his 
experiences managing a health and feeding program in Kenya's 
Kakuma refugee camp. He described the deteriorating situation 
of food rations and the high rate of malnutrition in the camp, 
which he attributed to an abandonment of minimum international 
humanitarian standards in food assistance. He offered several 
recommendations to provide more durable solutions for the 
refugees, including having the United States engage in 
multilateral diplomacy to share the burden among donor 
communities, continuing support for resettlement, exploring 
more aggressive and creative opportunities for voluntary 
repatriation, and continuing efforts to achieve peace in 
countries generating Kenyan refugees, notably Sudan and 
Somalia.

17. When Diets Turn Deadly: Consumer Safety and Weight-Loss Supplements 
        (July 31, 2002)

     This hearing focused on the role and responsibility of the 
Federal Government to ensure the safety of nutritional 
supplements. The hearing probed whether health concerns raised 
by other governments and organizations are valid, what actions 
the Federal Government should take in light of product recalls 
in Canada, and whether the Dietary Supplement Health and 
Education Act (DSHEA) of 1994 and the system through which 
adverse events are reported to the government are working to 
adequately protect American consumers from dangerous 
supplements.
    Witnesses: Janet Heinrich, Director, Health Care--Public 
Health Issues, U.S. General Accounting Office; Michael F. 
Mangano, Principal Deputy Inspector General, Office of the 
Inspector General, U.S. Department of Health and Human 
Services; Joseph A. Levitt, Esq., Director, Center for Food 
Safety and Applied Nutrition, Food and Drug Administration, 
U.S. Department of Health and Human Services, accompanied by 
Dr. Christine Lewis Taylor, Director, Office of Nutritional 
Products, Labeling and Dietary Supplements (ONPLDS), Center for 
Food Safety and Applied Nutrition (CFSAN), and John Taylor, 
Director, Office of Enforcement, Office of Regulatory Affairs 
(ORA), Food and Drug Administration (FDA); Karen Ruiz, 
Consumer, San Clemente, California; Steven B. Heymsfeld, M.D., 
Deputy Director, New York Obesity Research Center, St. Luke's-
Roosevelt Hospital Center, Professor of Medicine, Columbia 
University, College of Physicians and Surgeons; Michael 
McGuffin, President, American Herbal Products Association 
(AHPA), Silver Spring, Maryland; and Cynthia T. Culmo, R.Ph., 
Chairperson, Drugs, Devices, and Cosmetics Committee, 
Association of Food and Drug Officials, Austin, Texas.
    Ms. Heinrich outlined GAO's evaluation of dietary 
supplement oversight, noting that weaknesses in FDA's voluntary 
adverse event reporting system and lack of clinical trial 
evidence have hindered FDA's ability to address safety 
concerns. She stated that FDA has been slow to finalize good 
manufacturing practices rules which could help in oversight of 
product dosage and contamination issues. She indicated that 
Federal efforts have predominantly focused on marketing 
oversight rather than safety oversight. Mr. Mangano cited three 
deficiencies in the voluntary adverse event reporting system, 
specifically that it detects few adverse events due to the 
system's inherent passivity; that it lacks sufficient 
information about consumer medical records, product 
ingredients, and identity of manufacturers to meaningfully 
analyze reported events and any public health concerns; and it 
does not permit analysis of data to determine whether action in 
the interest of public health is warranted. Mr. Levitt 
discussed FDA's strategic plan for full implementation of the 
DSHEA requirements, stressing the need for increased resources, 
better research, and a framework for evaluating product safety.
    Ms. Ruiz described her personal experience with using 
ephedra products to lose weight and increase energy, and the 
resultant adverse consequences on her health, including manic 
episodes, paranoia, and loss of sleep. She urged that 
supplement product manufacturers bear the burden of proving 
safety, that warnings be posted, and that labeling include a 
contact number for the FDA. Dr. Heymsfield explained that the 
number of subjects studied in clinical trials of dietary 
supplements has been quite small and since they are carefully 
screened, are healthier than the general consumer population. 
He noted that even among healthy subjects, stimulant side 
effects were experienced, such as palpitations and elevated 
blood pressure. He posited that because dietary supplements 
fall outside the realm of regulated drugs which must meet 
stringent safety and effectiveness standards, passage of DSHEA 
opened up a window for the marketing of ineffective or unsafe 
products to highly vulnerable populations. Mr. McGuffin shared 
his organization's belief that FDA enforcement of labeling and 
advertising requirements for dietary supplements under DSHEA 
could be strengthened. He stressed the benefits of industry 
self-regulation, and recommended that the FDA adopt the 
labeling and dosage guide used by his organization to ensure 
products meet label claims, and are not used by children or 
individuals with preexisting conditions, who could have adverse 
reactions. Ms. Culmo testified that ephedrine alkaloid products 
have generated the most adverse event reports of any dietary 
supplement. She noted that while Federal rules prohibit drug 
products containing ephedrine to be combined with other 
stimulants, currently marketed (but unregulated) dietary 
supplements which contain ephedrine do include other stimulants 
and other active ingredients, which have complex interactions 
and safety impacts. She called for premarket safety reviews, 
manufacturer and distributor registration with the FDA, product 
listing, mandatory adverse event reporting, a single adverse 
event reporting system, enhanced intergovernmental 
communication, defined criteria for standard of risk, a center 
for regulatory oversight of dietary supplements, and 
appropriate funding for oversight responsibilities.

18. Responding to the Public Health Threat of West Nile Virus 
        (September 24, 2002)

     The hearing, held jointly with the Senate Committee on 
Health, Education, Labor and Pensions, focused on the emerging 
health threat posed by West Nile virus, as well as the adequacy 
of the Federal and State response to increased disease 
incidence. Ongoing research related to the virus was explored 
along with future challenges facing various Federal and State 
agencies to effectively respond to health threats posed by 
naturally occurring infectious diseases.
    Witnesses: Julie Louise Gerberding, M.D., M.P.H., Director, 
Centers for Disease Control and Prevention, U.S. Department of 
Health and Human Services; Anthony Fauci, M.D., Director, 
National Institute of Allergy and Infectious Diseases, National 
Institutes of Health (NIH); Jesse L. Goodman, M.D, M.P.H, 
Deputy Director, Center for Biologics Evaluation and Research, 
Food and Drug Administration, U.S. Department of Health and 
Human Services; Sidney Andrew Houff, M.D., Ph.D., President and 
Chairman, Department of Neurology, and Director, Neuroscience 
and Aging Institute, Loyola University Medical Center, Maywood, 
Illinois; John R. Lumpkin, M.D., Director, Illinois Department 
of Public Health, Springfield, Illinois; Nickie Monica, Parish 
President, St. John the Baptist Parish, LaPlace, Louisiana, and 
Fay W. Boozman, M.D., MPH, Director, Arkansas Department of 
Health.
    Dr. Gerberding explained that West Nile Virus is a 
mosquito-borne virus which moves through birds and mosquitos. 
As of the date of the hearing, there were 1,965 human cases in 
32 States and the District of Columbia, with 94 deaths. She 
recommended eliminating standing water and use of insect 
repellant and window screens. Dr. Fauci described the three 
arenas of research conducted by the NIH: Basic research, vector 
research, and vaccine development. Dr. Goodman addressed the 
issue of the safety of the blood supply at blood banks and 
risks associated with receiving donated blood and organs. He 
emphasized the need to develop a test to screen donor blood for 
West Nile Virus before it goes to a recipient. Dr. Houff 
testified there has been a change in the clinical 
manifestations of the West Nile Virus and that treatment is 
presently limited to supportive therapy. He stressed the 
importance of surveillance centers to monitor arbovirus 
infections. Dr. Lumpkin described efforts underway in Illinois, 
which has been among the States affected hardest by the 
outbreak. He addressed the impact of State and local budget 
constraints on the ability to devote needed resources to the 
problem, stressing the need for Federal assistance. He urged 
continuation of research among the avian population and 
intensive study of communities where the outbreaks have 
occurred. Mr. Monica discussed the measures taken in his 
community to combat the West Nile Virus, including the 
implementation of a mosquito control program, spraying, and 
public education to minimize larvae hatchings near homes and 
businesses. He implored the Federal Government to provide 
emergency funding for expanded surveillance, testing, and 
laboratories. Dr. Boozman proposed more immediate assistance to 
States which are dealing with the virus on a daily basis for 
spraying, larvacide, and education programs. He noted the 
critical need to invest in public health laboratories to 
increase their capacities to meet the challenges of emerging 
diseases.

19. Ephedra: Who is Protecting the American Consumers? (October 8, 
        2002)

    This hearing, a followup to the Subcommittee's July 31, 
2002 introductory hearing on oversight of dietary supplements, 
focused more specifically on ephedra-containing products. The 
hearing delved into what U.S. Government agencies and private 
organizations are doing to protect consumers from harm from 
these products. The hearing examined the current voluntary 
adverse event reporting system for dietary supplements and 
whether this system is adequate to protect public health. The 
hearing emphasized that hazardous products are being sold that 
people are led to believe are safe, that issuance of rules to 
implement Federal law on dietary supplement enacted 8 years ago 
has been too slow, and that much work remains to be done by 
both FDA and Congress to meet the government's obligation to 
protect American consumers.
    Witnesses: Kevin and Debbie Riggins, Lincoln, Illinois; 
Charles Fricke, Logan County Coroner, Lincoln, Illinois; Lanny 
J. Davis, Esq., Counsel, on behalf of David W. Brown, 
President, and Chief Executive Officer, Metabolife 
International, Inc., San Diego, California; J. Howard Beales, 
III, Ph.D., Director, Bureau of Consumer Protection, U.S. 
Federal Trade Commission; Bill Jeffery, LL.B., National 
Coordinator, Centre for Science in the Public Interest (CSPI), 
Carleton University, Ottawa, Ontario, Canada; Ronald M. Davis, 
M.D., Board of Trustees, American Medical Association, Chicago, 
Illinois; Sidney M. Wolfe, M.D., Director, Public Citizen 
Health Research Group; Frank D. Uryasz, President, The National 
Center for Drug Free Sport, Inc., Kansas City, Missouri, on 
behalf of the National Collegiate Athletic Association (NCAA); 
Lester M. Crawford, D.V.M., Ph.D., Acting Commissioner, Food 
and Drug Administration, U.S. Department of Health and Human 
Services. Robert Occhifinto, President of NVE Pharmaceuticals, 
the manufacturer of Yellow Jackets, declined the Subcommittee's 
invitation to testify on the basis of a schedule conflict.
    Mr. and Mrs. Riggins related their experience as the 
parents of Sean Riggins, a healthy, 16-year-old high school 
student and athlete, who tragically died after using an ephedra 
product known as ``Yellow Jackets.'' Mr. Riggins expressed his 
concern about the easy access to dangerous herbal supplements 
in flashy packaging attractive to young people, and the need 
for regulations prohibiting sale to minors. Mr. Fricke 
described his coroner's examination into the cause of Sean's 
death, explaining that the forensic pathologist determined that 
Sean's death from an acute myocardial infarction (severe heart 
attack) was consistent with the effects of ephedrine. Mr. 
Fricke also explained how easy it is to obtain the products and 
how Sean's death has heightened the awareness among youth and 
the community about the dangers of the product.
    Senator Durbin reviewed the findings of a report prepared 
by the minority staff of the House Government Reform Committee 
Special Investigations Division, in tandem with Senator 
Durbin's staff, which is the first independent analysis of over 
14,000 adverse event reports turned over to the FDA by 
Metabolife, Inc., a dietary supplement manufacturer. The 
findings reflected that the reports involve many significant 
adverse events and conflict with Metabolife's statements that 
it was unaware of consumer reports of adverse health effects. 
Moreover, the report finds that Metabolife took a careless 
approach to the adverse event reports, did not report them in a 
timely fashion to FDA, and routinely failed to obtain the 
medical records necessary to evaluate the safety of its 
products.
    Mr. Davis stressed that Metabolife be used only for weight 
control purposes, at the recommended dosage level, and under 
the supervision of a doctor. He also rejected the reliability 
of adverse event reports, calling them unreliable and flawed. 
Dr. Beales described FTC's role in policing deceptive 
advertising practices and ensuring that products do not 
exaggerate or make unfounded claims about safety. He also 
stated the FTC has filed over 80 law enforcement actions over 
the past decade challenging false or unsubstantiated claims 
about efficacy or safety of dietary supplements. Mr. Jeffery 
testified about the January 2002 decision of the Canadian 
Government to issue a voluntary recall of all ephedra products 
after 60 adverse event reports and one death occurred. The 
Canadian Government determined that there was a ``reasonable 
probability that use of or exposure to ephedra products will 
cause serious adverse health consequences or death.'' Dr. Davis 
stated that the physician members of the AMA are very concerned 
about the quality, safety, and efficacy of dietary supplements, 
believe that DSHEA does not provide for adequate FDA oversight 
of dietary supplements, and strongly support removal of dietary 
supplements containing ephedrine alkaloids from the U.S. 
market.
    Dr. Wolfe shared information about the ban of sale of 
ephedra-containing products in U.S. Army and Air Force military 
exchanges and commissaries worldwide. He questioned why the FDA 
has failed to act to ban ephedra alkaloid-containing dietary 
supplements, despite evidence of the hazards. Mr. Uryasz 
discussed the NCAA's concerns that the use of ephedrine was 
being so closely linked to athletic performance and how that 
led to NCAA's inclusion of ephedrine on its list of banned 
substances. He outlined NCAA's expanded testing and prevention 
educational programs on the dangers of ephedrine usage.
    Dr. Crawford described FDA's regulatory and enforcement 
authority and actions on dietary supplements, emphasizing that 
unlike prescription drugs and over-the-counter drugs, the DSHEA 
places the burden of proof on the government, rather than the 
manufacturer, to prove a dietary supplement product is not safe 
and effective. He announced FDA's recent efforts to publish 
proposed rules on good manufacturing practices. Dr. Crawford 
also noted that a study by the RAND Corporation analyzing the 
published work on ephedrine is underway with results expected 
by year end.

                            II. GAO Reports

    During the 107th Congress, the Subcommittee worked in 
conjunction with the General Accounting Office on the following 
reports and studies:

    Human Capital: Key Principles From Nine Private Sector 
Organizations, GGD-00-28 (01/31/2000)
    District of Columbia Government: Performance Report's 
Adherence to Statutory Requirements, GGD-00-107 (04/14/2000)
    Financial Management: Census Monitoring Board 
Disbursements, Internal Control Weaknesses, and Other Matters, 
AIMD-00-317 (09/29/2000)
    D.C. Criminal Justice System: Better Coordination Needed 
Among Participating Agencies, GAO-01-187 (03/30/2001)
    Managing for Results: Human Capital Management Discussions 
in Fiscal Year 2001 Performance Plans, GAO-01-236 (04/24/2001)
    District of Columbia: Comments on Fiscal Year 2000 
Performance Report, GAO-01-804 (06/08/2001)
    Food Safety and Security: Fundamental Changes Needed to 
Ensure Safe Food, GAO-02-47T (10/10/2001)
    D.C. Tuition Assistance Grants: Program May Increase 
College Choices, but a Few Program Procedures May Hinder Grant 
Receipt for Some Residents, GAO-02-265 (01/31/2002)
    Private Health Insurance: Access to Individual Market 
Coverage May Be Restricted for Applicants with Mental 
Disorders, GAO-02-339 (02/28/2002)
    Preliminary Information on Proposal for Next-Day 
Destruction of Records Generated by the National Instant 
Criminal Background System (NCIS), GAO-02-511R (03/11/2002)
    District of Columbia: Performance Report Reflects Progress 
and Opportunities for Improvement, GAO-02-588 (04/15/2002)
    DCPS: Attorney's Fees for Access to Special Education 
Opportunities, GAO-02-559R (07/10/2002)
    Gun Control: Potential Effects of Next-Day Destruction of 
NICS Background Check Records, GAO-02-653 (04/10/2002)
    Results-Oriented Cultures: Insights for U.S. Agencies from 
Other Countries' Performance Management Initiatives, GAO-02-862 
(08/02/2002)
    Results-Oriented Cultures: Using Balanced Expectations to 
Manage Senior Executive Performance, GAO-02-966 (09/27/2002)
    Human Capital: Effective Use of Flexibilities Can Assist 
Agencies in Managing Their Workforces, GAO-03-2 (10/21/2002)

                            III. Legislation

    The following bills were considered by the Subcommittee on 
Oversight of Government Management, Restructuring and the 
District of Columbia during the 107th Congress:

                       Measures Enacted into Law

    S.1382--The District of Columbia Family Court Act of 2001. 
This bill addresses growing concerns about how child welfare 
proceedings are handled within the Presidentially-appointed, 
federally-funded local court system in the District of 
Columbia. Mounting numbers of child abuse and neglect cases, 
and the tragic deaths of some 200 children while in the 
District's foster care system, prompted the introduction of 
this bill to restructure the District of Columbia Superior 
Court. The bill redesignates the existing Family Division as 
the Family Court, revamps and consolidates the management of 
child abuse and neglect case dockets, and requires recruitment 
and retention of trained and experienced judges to serve in the 
Family Court. The bill was introduced on August 3, 2001 by 
Senators Mike DeWine and Mary Landrieu and was referred to the 
Senate Committee on Governmental Affairs. On September 10, 
2001, the bill was referred to the Subcommittee, which held a 
hearing, ``Promoting the Best Interests of Children: Proposals 
to Establish a Family Court in the District of Columbia 
Superior Court'' on October 25, 2001. The hearing was an 
opportunity to hear from bill sponsors, judicial 
administrators, practitioners, and experts about the components 
of S. 1382 and a similar House bill, H.R. 2657. S. 1382 was 
polled out of the Oversight of Government Management, 
Restructuring and the District of Columbia Subcommittee on 
November 12, 2001. On November 14, 2001, S. 1382 was considered 
by the full Committee on Governmental Affairs. A substitute 
amendment, developed in collaboration with Senate sponsors, was 
offered by Senator Durbin, and adopted by voice vote. S. 1382, 
as amended, was ordered reported by the Committee on 
Governmental Affairs by voice vote (S. Rept. 107-107). The 
Subcommittee concurrently reported the similar House bill, H.R. 
2657 as amended (S. Rept. 107-108). H.R. 2657, more fully 
described below, became the vehicle to advance this legislation 
to enactment (P.L. 107-114).
     H.R. 2657--District of Columbia Family Court Act of 2001. 
This bill, like a similar Senate bill (S. 1382) described 
above, addresses the need to restructure how child welfare 
proceedings are handled within the Presidentially-appointed, 
federally-funded local court system in the District of 
Columbia. The bill redesignates the Family Division as the 
Family Court, revamps and consolidates the management of child 
abuse and neglect case dockets, and requires recruitment and 
retention of trained and experienced judges to serve in the 
Family Court. H.R. 2657, introduced on July 26, 2001 by 
Representative Tom DeLay and cosponsored by Delegate Eleanor 
Holmes Norton and Representatives Connie Morella and Tom Davis, 
was referred to the Committee on Government Reform. On August 
13, 2001, H.R. 2657 was referred to the Subcommittee on the 
District of Columbia, which held a mark-up session to consider 
the bill that same day. On September 20, 2001, H.R. 2657 was 
passed by the House of Representatives under suspension of the 
rules by a vote of 408-0. On September 21, 2001, H.R. 2657 was 
received in the Senate, and was referred to the Senate 
Committee on Governmental Affairs. The bill was referred to the 
Subcommittee on October 16, 2001. On October 25, 2001, the 
Subcommittee conducted a hearing, ``Promoting the Best 
Interests of Children: Proposals to Establish a Family Court in 
the District of Columbia Superior Court'' to consider the 
elements of H.R. 2657 and the similar S. 1382, including 
provisions to place all cases involving one family before one 
judge, assign a team of magistrates and social workers to 
assist the judicial function, mandate minimum terms for service 
for judges on the Family Court, and transfer all child abuse 
and neglect cases now dispersed across the court back under a 
Family Court helm. H.R. 2657 was polled out of the Subcommittee 
on November 12, 2001. On November 14, 2001, H.R. 2657 was 
considered by the full Committee on Governmental Affairs. A 
substitute amendment, developed in collaboration with Senate 
bill sponsors, was offered by Senator Durbin. The Durbin 
amendment was adopted by voice vote, and H.R. 2657, as amended, 
was ordered reported by voice vote (S. Rept. 107-108). On 
December 14, 2002, by unanimous consent, the Senate adopted the 
committee substitute amendment to H.R. 2657 and a manager's 
amendment offered by Senators Lieberman and Thompson, and 
passed the bill, as amended. On December 19, 2001, the House of 
Representatives, under suspension of the rules, agreed to the 
Senate amendment on a roll call vote of 418-1. On January 8, 
2002, the President signed the bill into law as Public Law 107-
114.
    H.R. 1499--District of Columbia College Access Improvement 
Act of 2002. This bill eliminates the requirement under the 
District of Columbia College Access Act of 1999 that residents 
of the District of Columbia must continue on to college within 
3 years of high school graduation in order to be eligible for 
tuition assistance through the College Access Act program. The 
bill expands the list of eligible institutions to include 
private Historically Black Colleges and Universities 
nationwide. The bill also expands the universe of eligible 
students to include all District of Columbia residents who have 
resided in the District of Columbia for at least 5 consecutive 
years prior to applying for the program and who are enrolled at 
an eligible institution as of the date of enactment of this 
Act. The bill requires that a dedicated account be established 
for the resident tuition support program, and clarifies 
requirements on the use of administrative funds. H.R. 1499 was 
introduced as the District of Columbia College Access Act 
Technical Corrections Act of 2001, on April 4, 2001, by 
Representative Connie Morella, Delegate Eleanor Holmes Norton, 
and Representative Tom Davis. H.R. 1499 was approved by 
unanimous consent by the House Subcommittee on the District of 
Columbia on June 26, 2001, ordered to be reported by the full 
Committee on Government Reform on July 25, 2001, and passed by 
the House of Representatives on July 30, 2001 by voice vote. 
H.R. 1499 was received in the Senate on July 31, 2001 and was 
referred to the Committee on Governmental Affairs. The bill was 
referred to the Subcommittee on September 10, 2001. The bill 
was favorably polled out of the Subcommittee on November 8, 
2001, and considered by the full Committee on November 14, 
2001. An amendment in the nature of a substitute offered by 
Senator George Voinovich was adopted by voice vote. The 
Committee ordered the bill favorably reported, as amended, by 
voice vote (S. Rept. 107-101). On December 12, 2001, by 
unanimous consent, the full Senate adopted the Committee 
substitute, a Lieberman amendment to clarify the inclusion of 
certain individuals, and passed H.R. 1499, as amended. On March 
12, 2002, the House of Representatives agreed to the Senate 
amendments with further amendments pursuant to H.Res. 364 by 
voice vote. By unanimous consent, the Senate agreed to the 
House amendments to the Senate amendments on March 14, 2002. On 
April 4, 2002, the President signed the bill into law as Public 
Law 107-157.
    H.R. 2061--To amend the Charter of Southeastern University 
of the District of Columbia. This bill eliminates a requirement 
in the charter of the Southeastern University of the District 
of Columbia that one third of its Board of Trustees be 
comprised of alumni of the institution. H.R. 2061 was 
introduced in the House of Representatives on June 5, 2001 by 
Delegate Eleanor Holmes Norton. The bill was referred to the 
House Committee on Government Reform, and subsequently to the 
Subcommittee on the District of Columbia, which considered the 
bill and advanced it to the full committee on July 9, 2001. On 
July 25, 2001, the House Government Reform Committee approved 
the bill by voice vote and ordered it reported. The House of 
Representatives considered the bill under suspension of the 
rules and adopted the bill by voice vote on September 20, 2001. 
H.R. 2061 was received in the Senate on September 21, 2001, and 
referred to the Committee on Governmental Affairs. It was 
referred to the Subcommittee on October 16, 2001. The bill was 
unanimously polled out of the Subcommittee on November 7, 2001. 
The full Senate Committee on Governmental Affairs considered 
H.R. 2061 on November 14, 2001 and ordered the bill favorably 
reported by voice vote (S. Rept. 107-102). The Senate passed 
H.R. 2061 on December 6, 2001 by unanimous consent. On December 
21, 2001, the President signed the bill into law as Public Law 
107-93.
    H.R. 2199--District of Columbia Police Coordination 
Amendment Act of 2001. This bill amends the National Capital 
Revitalization and Self-Government Improvement Act of 1997 to 
permit any Federal law enforcement agency to enter into a 
cooperative agreement with the Metropolitan Police Department 
of the District of Columbia to assist the Department in 
carrying out crime prevention and law enforcement activities in 
the District of Columbia if deemed appropriate by the Chief of 
the Metropolitan Police Department and the U.S. Attorney for 
the District of Columbia. H.R. 2199 was introduced in the House 
of Representatives on June 14, 2001, by Delegate Eleanor Holmes 
Norton. The bill was referred to the House Committee on 
Government Reform, and on June 19, 2001, referred to the 
Subcommittee on District of Columbia. On June 26, 2001, the 
Subcommittee on District of Columbia considered the bill, and 
forwarded it to the full Committee on Government Reform by 
unanimous consent. On July 25, 2001, the Committee on 
Government Reform considered the bill and ordered it reported 
(without written report). On September 25, 2001, H.R. 2199 was 
considered by the House of Representatives under suspension of 
the rules, and passed by voice vote. H.R. 2199 was received in 
the Senate and referred to the Committee on Governmental 
Affairs on September 25, 2001. On October 16, 2001, it was 
referred to the Subcommittee, where it was favorably polled out 
on November 7, 2001. H.R. 2199 was considered by the Committee 
on Governmental Affairs on November 14, 2001, and ordered 
reported by voice vote (S. Rept. 107-103). The Senate passed 
H.R. 2199 by unanimous consent on December 11, 2001. On January 
8, 2002, the President signed the bill into law as Public Law 
107-113.
    H.R. 2305--Criminal Justice Coordinating Council 
Restructuring Act of 2002. This bill authorizes the heads of 
six Federal agencies, specifically, the Court Services and 
Offender Supervision Agency for the District of Columbia, the 
District of Columbia Pretrial Services Agency, the U.S. 
Attorney for the District of Columbia, the Federal Bureau of 
Prisons, the U.S. Parole Commission, and the U.S. Marshals 
Service, to meet regularly with District law enforcement 
officials as the Criminal Justice Coordinating Council (CJCC). 
H.R. 2305 strengthens the CJCC by authorizing Federal 
participation and funds. It requires the CJCC to submit to the 
President, Congress, and appropriate Federal and local agencies 
an annual report detailing its activities. H.R. 2305 was 
introduced on June 25, 2001 by Representative Connie Morella 
and Delegate Eleanor Holmes Norton. It was referred to the 
House Government Reform Subcommittee on the District of 
Columbia on July 9, 2001. H.R. 2305 was amended in the House 
subcommittee to address concerns raised by the Department of 
Justice that requiring participation by the Federal entities 
designated in the bill in this locally-constituted body could 
be read to authorize the local agencies comprising a majority 
of the CJCC to make decisions with binding authority on the 
Federal agency participants. The amendment allayed the concern 
by making clear that Federal agency involvement is merely 
authorized, not required, thereby making clear that the bill 
does not impose on the Federal agencies any obligation to 
accede to CJCC decisions. H.R. 2305, as amended, was reported 
to the full House Committee on Government Reform by voice vote 
on September 21, 2001. On December 4, 2001, H.R. 2305, as 
amended, was considered by the House of Representatives under 
suspension of the rules, and passed by voice vote. H.R. 2305, 
as passed in the House, was received in the Senate on December 
5, 2001, and referred to the Committee on Governmental Affairs. 
On December 17, 2001, the bill was referred to the 
Subcommittee, where it was favorably polled out on March 14, 
2002. H.R. 2305 was considered by the Committee on Governmental 
Affairs on March 21, 2002, and ordered reported by voice vote 
(S. Rept. 107-145). The Senate passed H.R. 2305 on May 7, 2002 
by unanimous consent. On May 20, 2002, the President signed the 
bill into law as Public Law 107-180.

    Measures Referred to Subcommittee Upon Which Hearings Were Held

    S. 1501--Safe Food Act of 2001. This bill would establish 
in the Executive Branch an independent Food Safety 
Administration to administer and enforce the food safety laws 
for the protection of public health. It directs the 
Administrator of Food Safety to oversee (1) implementation of 
Federal food safety inspection, enforcement, and research 
efforts, based on scientifically supportable assessments of 
risks to public health; (2) development of consistent and 
science-based standards for safe food; (3) coordination and 
prioritization of food safety research and education programs 
with other Federal agencies; (4) coordination of the Federal 
response to food-borne illness outbreaks with other Federal 
agencies and State agencies; and (5) integration of Federal 
food safety activities with State and local agencies. The bill 
would transfer to the Food Safety Administration all functions 
of the following Federal agencies that relate to administration 
or enforcement of the food safety laws, as determined by the 
President: (1) the Food Safety and Inspection Service of the 
Department of Agriculture; (2) the Center for Food Safety and 
Applied Nutrition of the Food and Drug Administration (FDA); 
(3) the Center for Veterinary Medicine of FDA; (4) the National 
Marine Fisheries Service of the National Oceanic and 
Atmospheric Administration of the Department of Commerce as it 
relates to the Seafood Inspection Program; and (5) such others 
as the President may designate by executive order. The bill was 
introduced on October 4, 2001 by Senator Richard Durbin and 
cosponsored by Senators Hillary Rodham Clinton, Barbara 
Mikulski, and Robert Torricelli, and referred to the Committee 
on Governmental Affairs. The bill was referred to the 
Subcommittee on October 16, 2001. The Subcommittee conducted 
two hearings related to S. 1501. The first hearing, ``Federal 
Food Safety Oversight: Does the Fragmented Structure Really 
Make Sense?'' was held on October 12, 2001, and the second 
hearing, ``Kids in the Cafeteria: How Safe Are Federal School 
Lunches?'' was held on April 30, 2002.

     Measures Which Did Not Advance Beyond Referral to Subcommittee

    S. 2316--District of Columbia Fiscal Integrity Act of 2002. 
This bill gives the District of Columbia budget authority over 
locally raised funds beginning October 1, 2003, while 
continuing Congressional authority to appropriate Federal 
payments to the District. The bill provides the District's 
chief financial officer (CFO) with greater autonomy, including 
procurement authority and control over personnel. Under the 
bill, the CFO is charged with monitoring the District's 
financial situation and directed to immediately notify Congress 
and the Mayor about any problems that would warrant 
reinstatement of a control board. The bill was introduced on 
April 25, 2002 by Senator Mary Landrieu, and was referred to 
Subcommittee on April 26, 2002.
    S. 2866--District of Columbia Student Opportunity 
Scholarship Act of 2002. This bill authorizes the establishment 
of the District of Columbia Scholarship Corporation as a 
private, nonprofit corporation to administer, publicize, and 
evaluate a District scholarship program and determine 
elementary and secondary student and school eligibility. It 
establishes a District of Columbia Scholarship Fund, to be 
administered by the Secretary of the Treasury. It provides for 
a seven-member Corporation Board of Directors, with six members 
appointed by the President from nominees submitted by the 
Senate and the House of Representatives, and one member 
appointed by the Mayor of the District of Columbia. The bill 
authorizes the Corporation to award tuition scholarships and 
enhanced achievement scholarships to District students in 
kindergarten through grade 12 with family incomes not exceeding 
185 percent of the national poverty line. Under the bill, these 
scholarships could be used for tuition, fees, and appropriate 
transportation to public, private, or independent schools (or 
beyond-school-hours enhancement programs) in the District and 
specified neighboring counties and cities in Maryland and 
Virginia. The bill was introduced on August 8, 2002 by Senator 
Judd Gregg, and cosponsored by Senators Sam Brownback, Larry 
Craig, and Tim Hutchinson, and referred to the Senate Committee 
on Governmental Affairs. The bill was referred to the 
Subcommittee on August 30, 2002.

                PERMANENT SUBCOMMITTEE ON INVESTIGTIONS


                       Chairman: Susan M. Collins


                  Ranking Minority Member: Carl Levin

    The following is the annual Activities Report of the 
Permanent Subcommittee on Investigations during the 107th 
Congress:

                        I. Historical Background


                      A. Expansion of Jurisdiction

    The Permanent Subcommittee on Investigations was originally 
authorized by Senate Resolution 189 on January 28, 1948. At its 
creation in 1948, the Subcommittee was part of the Committee on 
Expenditures in the Executive Departments. The Subcommittee's 
records and broad investigative jurisdiction over government 
operations and national security issues, however, actually 
antedate its creation, since it was given custody of the 
jurisdiction of the former Special Committee to Investigate the 
National Defense Program (the so-called ``War Investigating 
Committee'' or ``Truman Committee''), chaired by Senator Harry 
S Truman during the Second World War. Today, the Subcommittee 
is part of the Committee on Governmental Affairs.\1\
---------------------------------------------------------------------------
    \1\ In 1952, the parent committee's name was changed to the 
Committee on Government Operations. It was changed again in early 1977, 
to the Committee on Governmental Affairs, its present title.
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    The Subcommittee has had nine chairmen: Senators Homer 
Ferguson of Michigan (1948), Clyde R. Hoey of North Carolina 
(1949-1952), Joseph R. McCarthy of Wisconsin (1953-1954), John 
L. McClellan of Arkansas (1955-1972), Henry M. Jackson of 
Washington (1973-1978), Sam Nunn of Georgia (1979-1980 and 
1987-1994), William V. Roth of Delaware (1981-1986 and 1995-
1996), Susan M. Collins of Maine (1997-2001); and Carl Levin of 
Michigan (2001-2002).
    Until 1957, the Subcommittee's jurisdiction focused 
principally on waste, inefficiency, impropriety, and illegality 
in government operations. Its jurisdiction has expanded 
considerably since then, however, today encompassing 
investigations within the broad ambit of the parent committee's 
responsibility for matters relating to the efficiency and 
economy of operations of all branches of the government, 
including matters related to: (a) waste, fraud, abuse, 
malfeasance, and unethical practices in government contracting 
and operations; (b) criminality or improper practices in labor-
management relations; (c) organized criminal activities 
affecting interstate or international commerce; (d) criminal 
activity affecting the national health, welfare, or safety, 
including investment fraud, commodity and securities fraud, 
computer fraud, and use of offshore banking and corporate 
facilities to carry out criminal objectives; (e) the 
effectiveness of present national security methods, staffing 
and procedures, and U.S. relationships with international 
organizations concerned with national security; (f) energy 
shortages, energy pricing, management of government-owned or 
controlled energy supplies; and relationships with oil 
producing and consuming countries; and (g) the operations and 
management of Federal regulatory policies and programs. While 
technically reduced to a subcommittee of a standing committee, 
the Subcommittee has long exercised its authority as almost a 
separate entity, selecting its own staff, issuing its own 
subpoenas, and determining its own investigatory agenda.
    The Subcommittee acquired this sweeping jurisdiction in 
several successive stages. In 1957--based on information 
developed by the Subcommittee--the Senate passed a Resolution 
establishing a Select Committee on Improper Activities in the 
Labor or Management Field. Chaired by Senator McClellan, who 
also chaired the Subcommittee at that time, the Select 
Committee was composed of eight Senators--four of whom were 
drawn from the Subcommittee on Investigations and four from the 
Committee on Labor and Public Welfare. The Select Committee 
operated for 3 years, sharing office space, personnel, and 
other facilities with the Permanent Subcommittee. Upon its 
expiration in early 1960, the Select Committee's jurisdiction 
and files were transferred to the Subcommittee on 
Investigations, greatly enlarging the latter body's 
investigative authority in the labor-management area.
    The Subcommittee's jurisdiction expanded further during the 
1960's and 1970's. In 1961, for example, it received authority 
to make inquiries into matters pertaining to organized crime 
and, in 1963, held the famous Valachi hearings described below, 
examining the inner workings of the Italian Mafia. In 1967, 
following a summer of riots and other civil disturbances, the 
Senate approved a Resolution directing the Subcommittee to 
investigate the causes of this disorder and to recommend 
corrective action. In January 1973, the Subcommittee acquired 
its national security mandate when it merged with the National 
Security Subcommittee. With this merger, the Subcommittee's 
jurisdiction was broadened to include inquiries concerning the 
adequacy of national security staffing and procedures, 
relations with international organizations, technology transfer 
issues, and related matters. In 1974, in reaction to the 
gasoline shortages precipitated by the Arab-Israeli war of 
October 1973, the Subcommittee acquired jurisdiction to 
investigate government operations involving the control and 
management of energy resources and supplies.
    In 1997, the full Committee on Governmental Affairs was 
charged by the Senate to conduct a special examination into 
illegal or improper activities in connection with Federal 
election campaigns during the 1996 election cycle. The 
Permanent Subcommittee provided substantial resources and 
assistance to this investigation, contributing to a greater 
public understanding of what happened, to subsequent criminal 
and civil legal actions taken against wrongdoers, and to 
enactment of campaign finance reforms in 2001.

                         B. Past Investigations

    Armed with its broad jurisdictional mandate, the 
Subcommittee has in recent years conducted investigations into 
a wide variety of topics of public concern, ranging from child 
pornography to espionage, including reviews of organized crime 
activities such as labor racketeering, fraudulent insurance 
plans, and newly emerging criminal groups. The Subcommittee has 
also conducted investigations into numerous aspects of the 
narcotics trade, including money laundering, issues in Federal 
drug enforcement, and drug abuse. The Subcommittee has also 
devoted itself to investigating allegations of waste, fraud, 
and abuse in government programs and consumer protection 
issues, addressing problems ranging from the safety of imported 
foods to issues of Medicare fraud and mortgage ``flipping.'' 
Most recently, under Senator Levin's leadership, the 
Subcommittee has focused on money laundering, factors 
influencing the pricing of gasoline and crude oil, and the 
collapse of Enron Corporation.
    In 1998, the Subcommittee marked the 50th anniversary of 
the Truman Committee's conversion into a permanent subcommittee 
of the U.S. Senate.\2\ In the half-century of its existence, 
the Subcommittee's many successes have made clear to the Senate 
the importance of retaining a standing investigatory body 
devoted to keeping government not only efficient and effective, 
but also honest and accountable.
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    \2\ This anniversary also marks the first date upon which internal 
Subcommittee records generally began to become available to the public. 
Unlike most standing committees of the Senate whose previously 
unpublished records open after a period of 20 years has elapsed, the 
Permanent Subcommittee on Investigations, as an investigatory body, may 
close its records for 50 years to protect personal privacy and the 
integrity of the investigatory process. With this 50th anniversary, the 
Subcommittee's earliest records, housed in the Center for Legislative 
Archives at the National Archives and Records Administration, began to 
open seriatim. The records of the predecessor committee--the Truman 
Committee--were opened by Senator Nunn in 1980.
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                       (1) Historical Highlights

    The Subcommittee's investigatory record as a permanent 
Senate body began under the chairmanship of Republican Senator 
Homer Ferguson and his Chief Counsel (and future Attorney 
General and Secretary of State) William P. Rogers, as the 
Subcommittee inherited the Truman Committee's role in 
investigating fraud and waste in U.S. Government operations. 
This investigative work became particularly colorful under the 
chairmanship of Senator Clyde Hoey, a North Carolina Democrat 
who took the chair from Senator Ferguson after the 1948 
elections. The last U.S. Senator to wear a long frock coat and 
wing-tipped collar, Mr. Hoey was a distinguished southern 
gentleman of the old school. Under his leadership, the 
Subcommittee won national attention for its investigation of 
the so-called ``five percenters,'' notorious Washington 
lobbyists who charged their clients 5 percent of the profits 
from any Federal contracts they obtained on the client's 
behalf. Given the Subcommittee's jurisdictional inheritance 
from the Truman Committee, it is perhaps ironic that the ``five 
percenters'' investigation raised allegations of bribery and 
influence-peddling that reached right into the White House and 
implicated members of President Harry Truman's staff. In any 
event, the fledgling Subcommittee was off to a rapid start.
    What began colorful soon became contentious. When 
Republicans returned to the Majority in the Senate in 1953, 
Wisconsin's junior Senator, Joseph R. McCarthy, became the 
Subcommittee's chairman. Two years earlier, as Ranking Minority 
Member, Senator McCarthy had arranged for another Republican 
Senator, Margaret Chase Smith of Maine, to be removed from the 
Subcommittee. Senator Smith's offense, in Senator McCarthy's 
eyes, was her issuance of a ``Declaration of Conscience'' 
repudiating those who made unfounded charges and used character 
assassination against their political opponents. Although 
Senator Smith had carefully declined to name any specific 
offender, her remarks were universally recognized as criticism 
of Senator McCarthy's accusations that communists had 
infiltrated the State Department and other government agencies. 
Senator McCarthy retaliated by engineering Senator Smith's 
removal from the Subcommittee, replacing her with the newly-
elected Senator from California, Richard M. Nixon.
    Upon becoming Subcommittee Chairman, Senator McCarthy 
staged a series of highly publicized anti-communist 
investigations, culminating in an inquiry into communism within 
the U.S. Army, which became known as the Army-McCarthy 
hearings. During the latter portion of these hearings, in which 
the parent Committee examined the Wisconsin Senator's attacks 
on the army, Senator McCarthy recused himself, leaving South 
Dakota Senator Karl Mundt to serve as Acting Chairman of the 
Subcommittee. Gavel-to-gavel television coverage of the 
hearings helped turn the tide against Senator McCarthy by 
raising public concern about his treatment of witnesses and 
cavalier use of evidence. In December 1954, in fact, the Senate 
censured Senator McCarthy for unbecoming conduct; in the 
following year, the Subcommittee adopted new rules of procedure 
that better protected the rights of witnesses. The Subcommittee 
also strengthened the rules ensuring the right of both parties 
on the Subcommittee to appoint staff, initiate and approve 
investigations, and review all information in the 
Subcommittee's possession.
    In 1955, Senator John McClellan of Arkansas began 18 years 
of service as Chairman of the Permanent Subcommittee on 
Investigations. Senator McClellan appointed the young Robert F. 
Kennedy as the Subcommittee's Chief Counsel. That same year, 
Members of the Subcommittee were joined by Members of the 
Senate Labor and Public Welfare Committee on a special 
committee to investigate labor racketeering. Chaired by Senator 
McClellan and staffed by Kennedy and other Subcommittee staff 
members, this special committee directed much of its attention 
to criminal influence over the Teamsters Union, most famously 
calling Teamsters' leaders Dave Beck and Jimmy Hoffa to 
testify. The televised hearings of the special committee also 
introduced Senators Barry Goldwater and John F. Kennedy to the 
Nation, as well as leading to passage of the Landrum-Griffin 
Labor Act.
    After the special committee completed its work, the 
Permanent Subcommittee on Investigations continued to 
investigate organized crime. In 1962, the Subcommittee held 
hearings during which Joseph Valachi outlined the activities of 
La Cosa Nostra, or the Mafia. Former Subcommittee staffer 
Robert Kennedy--who had by now become Attorney General in his 
brother's Administration--used this information to prosecute 
prominent mob leaders and their accomplices. The Subcommittee's 
investigations also led to passage of major legislation against 
organized crime, most notably the Racketeer Influenced and 
Corrupt Organizations (RICO) provision of the Crime Control Act 
of 1970. Under Chairman McClellan, the Subcommittee also 
investigated fraud in the purchase of military uniforms, 
corruption in the Department of Agriculture's grain storage 
program, securities fraud, and civil disorders and acts of 
terrorism. From 1962 to 1970, the Permanent Subcommittee on 
Investigations conducted an extensive probe of political 
interference in the awarding of government contracts for the 
Pentagon's ill-fated TFX (``tactical fighter, experimental''). 
In 1968, the Subcommittee also examined charges of corruption 
in U.S. servicemen's clubs in Vietnam and elsewhere around the 
world.
    In 1973, Senator Henry ``Scoop'' Jackson, a Democrat from 
Washington, replaced Senator McClellan as the Subcommittee's 
chairman. During these years, recalled Chief Clerk Ruth Young 
Watt--who served in this position from the Subcommittee's 
founding until her retirement in 1979--Ranking Minority Member 
Charles Percy, an Illinois Republican, was more active on the 
Subcommittee than Chairman Jackson, who was often distracted by 
his Chairmanship of the Interior Committee and his active role 
on the Armed Services Committee.\3\ Senator Percy worked 
closely in this regard with Georgia Democrat Sam Nunn, who 
subsequently succeeded Senator Jackson as Chairman in 1979. As 
Chairman, Senator Nunn continued the Subcommittee's 
investigations into the role of organized crime in labor-
management relations and also investigated pension frauds.
---------------------------------------------------------------------------
    \3\ It had not been uncommon in the Subcommittee's history for the 
Chairman and Ranking Minority Member to work together closely despite 
their partisan differences, but Senator Percy was unusually active in 
the Minority--a role that included chairing one investigation of the 
hearing aid industry.
---------------------------------------------------------------------------
    The regular reversals of political fortunes in the Senate 
of the 1980's and 1990's saw Senator Nunn trade chairmanship 
three times with Delaware Republican William Roth. Senator Nunn 
served from 1979 to 1980 and again from 1987 to 1995, while 
Senator Roth served from 1981 to 1986, and again from 1995 to 
1996. These 15 years saw a strengthening of the Subcommittee's 
bipartisan tradition in which investigations were initiated by 
either the Majority or Minority and fully supported by the 
entire Subcommittee. For his part, Senator Roth led a wide 
range of investigations into commodity investment fraud, off-
shore banking schemes, money laundering, and child pornography. 
Senator Nunn led inquiries into Federal drug policy, the global 
spread of chemical and biological weapons, abuses in Federal 
student aid programs, computer security, airline safety, and 
health care fraud. Senator Nunn also appointed the 
Subcommittee's first female counsel, Eleanore Hill, who served 
as Chief Counsel to the Minority from 1982 to 1986 and then as 
Chief Counsel from 1987 to 1995. Ms. Hill subsequently served 
as Inspector General at the Department of Defense.

                       (2) Recent Investigations

    In January 1997, Republican Senator Susan Collins of Maine, 
became the first woman to chair the Permanent Subcommittee on 
Investigations. Senator John Glenn of Ohio became the Ranking 
Minority Member. After Senator Glenn's retirement, Michigan 
Democrat Carl Levin succeeded him in January 1999, as the 
Ranking Minority Member. During Senator Collins' chairmanship, 
the Subcommittee conducted a number of investigations affecting 
Americans in their day-to-day lives, including investigations 
into mortgage fraud, phony credentials obtained through the 
internet, deceptive mailings and sweepstakes promotions, day 
trading of securities, and securities fraud on the internet. 
Senator Levin, while Ranking Minority Member, initiated an 
investigation into money laundering, and in 1999, the 
Subcommittee held a hearing on money laundering issues 
affecting private banking. Senator Collins continued to chair 
the Subcommittee until June 2001, when the Senate Majority 
party changed hands, and Senator Levin assumed the 
chairmanship. Senator Collins, in turn, became the Ranking 
Minority Member.
    During the 107th Congress, then, both Senator Collins and 
Senator Levin chaired the Subcommittee. In her 6 months 
chairing the Subcommittee at the start of the 107th Congress, 
Senator Collins held hearings examining issues related to cross 
border fraud, the improper operation of tissue banks, and 
Federal programs designed to fight diabetes. During the 
following 18 months, Senator Levin led a bipartisan 
Subcommittee investigation of the Enron Corporation, which had 
collapsed into bankruptcy just before Senator Levin became the 
Chairman. Senator Levin also advanced the investigation he had 
initiated while Ranking Minority Member into issues related to 
money laundering and opened new investigations into offshore 
tax havens and tax scams, border security, and the pricing of 
gasoline and other fuels. The following pages describe the 
Subcommittee's work during the 107th Congress.

          II. Subcommittee Hearings During the 107th Congress


A. Role of U.S. Correspondent Banking in International Money Laundering 
        (March 1, 2, and 6, 2001)

    The first hearings held by the Subcommittee during the 
107th Congress presented evidence of serious money laundering 
problems affecting a category of banking services called 
correspondent banking. Correspondent banking occurs when one 
bank provides services to another bank to move funds or carry 
out other financial transactions. It is an essential feature of 
international banking, allowing the rapid movement of funds 
across borders among banks to enable the banks and their 
clients to conduct business worldwide.
    The Subcommittee's year-long investigation found that too 
many U.S. banks, through the correspondent accounts they 
provide to foreign banks carrying high risks of money 
laundering, had become conduits for illicit funds associated 
with drug trafficking, financial fraud, Internet gambling, and 
other crimes. The investigation identified three categories of 
foreign banks with high risks of money laundering: Shell banks, 
offshore banks, and banks in jurisdictions with weak anti-money 
laundering controls. The investigation found that, because many 
U.S. banks had routinely failed to screen and monitor these 
high-risk foreign banks as clients, they were exposed to poorly 
regulated, poorly managed, sometimes corrupt, foreign banks 
with weak or no anti-money laundering controls. The 
investigation determined that U.S. correspondent accounts had 
been used by these foreign banks, their owners and criminal 
clients to gain direct access to the U.S. financial system, to 
benefit from the safety and soundness of the U.S. banking 
system, and to launder dirty money through U.S. bank accounts.
    In February 2001, Senator Levin released a 450-page report 
prepared by his staff detailing the money laundering problems 
uncovered in correspondent banking. The report indicated that 
virtually every U.S. bank examined had opened correspondent 
accounts for high-risk foreign banks. The report also presented 
ten detailed case histories showing how high-risk foreign banks 
managed to move billions of dollars through U.S. banks, 
including hundreds of millions of dollars in illicit funds 
associated with drug trafficking, financial fraud, or Internet 
gambling. In some cases, the foreign banks were engaged in 
criminal behavior; in others, the foreign banks had such poor 
anti-money laundering controls that they did not know or 
appeared not to care whether their clients were engaged in 
criminal behavior. Several of the foreign banks operated well 
outside the parameters of normal banking practices, without 
basic fiscal or administrative controls, account opening 
procedures or anti-money laundering safeguards. All had limited 
resources and staff and relied heavily upon their U.S. 
correspondent accounts to conduct operations, provide client 
services, and move funds. Most completed virtually all of their 
transactions through their correspondent accounts, making 
correspondent banking integral to their operations. The result 
was that their U.S. correspondent accounts served as a 
significant gateway into the U.S. financial system for 
criminals and money launderers.
    In March, the Subcommittee held 3 days of hearings 
examining the problem of international correspondent banking 
and money laundering from several perspectives. The first 
witness was a former offshore bank owner, John Mathewson, who 
pled guilty to conspiracy to commit money laundering and tax 
evasion and has spent recent years helping to prosecute his 
former clients for tax evasion and other crimes. Mr. Mathewson 
testified that 95 percent of his 2,000 clients had been U.S. 
citizens, and he believed that 100 percent of his bank clients 
were engaged in tax evasion. He characterized his offshore bank 
as a ``run-of-the-mill'' operation. He also said that the 
Achilles' heel of the offshore banking community was its 
dependence upon correspondent banks to do business and that was 
how jurisdictions like the United States could take control of 
the situation and stop abuses, if the United States had the 
political will to do so.
    The March hearings also heard from correspondent bank 
officers and their supervisors at three major U.S. banks, Bank 
of America, Chase Manhattan Bank, and Citibank. The witnesses 
were James C. Christie, Senior Vice President, Global Treasury 
Risk Management, at Bank of America; David Weisbrod, Senior 
Vice President, Treasury Services Division, at Chase Manhattan 
Bank; and several officers from Citibank, including Jorge 
Bermudez, Executive Vice President, Head of e-Business, at 
Citibank in New York, Carlos Fedrigotti, Executive Vice 
President and Country Corporate Officer at Citibank Argentina, 
and Martin Lopez, (formerly with Citibank Argentina), Vice 
President and Corporate Bank Head, at Citibank South Africa. 
The hearings showed how each of these U.S. banks opened 
accounts for high-risk foreign banks, despite significant money 
laundering risks and even after being confronted with 
disturbing evidence of misconduct or suspicious transactions.
    The hearings also heard testimony from correspondent 
banking and money laundering experts: Jack Blum of the Lobel, 
Novins and Lamont law firm; Anne Vitale, former Managing 
Director and Deputy General Counsel at Republic National Bank 
of New York, and Robb Evans, former head of the California 
banking association and currently with Robb Evans and 
Associates, regarding the need for U.S. banks to maintain 
strong anti-money laundering controls in their correspondent 
banking operations. Another witness, Arthur Jacques of the 
Jacques Little law firm in Toronto, Ontario, Canada, spoke on 
behalf of some of the victims of money laundering through 
correspondent accounts, including one case in which 700,000 
credit cardholders who were defrauded of more than $40 million 
in illegal credit card charges by a criminal who sent the 
stolen funds to offshore banks with accounts at U.S. banks.
    Finally, the hearings heard from Federal law enforcement, 
including Joseph Myers, Acting Deputy Assistant Secretary for 
Enforcement Policy at the U.S. Department of the Treasury; and 
Mary Lee Warren, Deputy Assistant Attorney General for the 
Criminal Division at the U.S. Department of Justice. These 
witnesses testified about lessons learned from past money 
laundering cases that utilized correspondent banking and 
existing problems with U.S. anti-money laundering laws that 
impeded successful money laundering prosecutions.
    After the hearing, most of the high-risk foreign banks 
highlighted in the staff report were closed by their sponsoring 
jurisdictions, and many U.S. banks announced efforts to 
strengthen their anti-money laundering efforts in the 
correspondent banking field. The hearings and staff report also 
contributed to the enactment of stronger anti-money laundering 
provisions in Title III of the USA Patriot Act, which was 
signed into law in October 2001. Among other measures, the USA 
Patriot Act bars U.S. financial institutions from opening 
accounts for foreign shell banks and requires them to use 
enhanced due diligence before opening correspondent accounts 
for offshore banks or banks in jurisdictions that fail to 
cooperate with international anti-money laundering efforts. The 
USA Patriot Act also makes foreign corruption a predicate 
offense for U.S. money laundering prosecutions and requires 
U.S. financial institutions to use enhanced due diligence 
before opening a private banking account for a political figure 
or their close family members. A number of the Subcommittee's 
key recommendations were also incorporated in the leading 
international guidelines to prevent money laundering called the 
40 Recommendations, which are issued by the Financial Action 
Task Force on Money Laundering in the Organization for Economic 
Cooperation and Development, were revised in 2003, and have 
been used by the United States to evaluate foreign countries' 
anti-money laundering laws and practices.

B. Tissue Banks: Is the Federal Government's Oversight Adequate? (May 
        24, 2001)

    On May 24, 2001, the Subcommittee held a hearing examining 
the practices of the human tissue industry and the adequacy of 
the regulatory framework that governs the industry. The 
recovery and medical use of tissue, including skin, bone, 
cartilage, tendons, and ligaments are increasingly common and 
can play an essential role in improving the quality of 
recipients' lives through transplantation.
    Tissue banks procure, process, store, and distribute human 
tissue for transplantation. Tissue transplants have soared in 
recent years due to advances in technology that have greatly 
reduced the risk of rejection. In 1994, an estimated 6,000 
individuals donated tissue. By 1999, however, this figure had 
increased three-fold to approximately 20,000. Donors now make 
possible as many as 800,000 tissue transplants every year in 
the United States. Nevertheless, the industry that carries out 
these tasks has received little public scrutiny. The 
organizations that make up the tissue industry are collectively 
referred to as tissue banks. Some are engaged in tissue 
recovery, while others process, store, and distribute human 
tissue.
    While most people are familiar with the concept of organ 
donation, tissue donation is not as well understood. Human 
tissue is unlike an organ transplant because it is not usually 
transplanted ``as-is'' from the donor's body into that of the 
recipient. Rather, donated tissue generally undergoes 
considerable processing before it is transplanted into a 
patient. The reconfigured tissues are also known as 
``allografts.''
    Once it is processed, donated tissue can be stored for a 
period of time before it is used to enhance, improve, and even 
save lives. If, however, human tissue is not properly 
processed, it can pose dangerous risks to the recipient. 
Therefore, it is critical that the tissue come from carefully 
screened donors and that it be properly processed and stored. 
It is equally important to ensure that persons and organization 
involved in the tissue industry follow good tissue handling and 
processing practices in order to prevent contamination, and 
that the industry employ sound tracking procedures so that if a 
problem develops, all of the affected tissue recipients can be 
promptly notified.
    With the phenomenal growth and new uses for tissue 
transplants have come some problems. Incidents have been 
brought to light in which tissue obtained from unsuitable 
donors entered the American tissue supply, raising questions 
about the adequacy of Federal regulation. Other concerns were 
raised about whether the practices of some tissue banks are 
sufficient to reduce the danger of spreading such illnesses as 
the human variant of ``mad cow disease.''
    The Food and Drug Administration (FDA) has been aware of 
the public health risks. In 1997, the agency examined the 
health issues involving tissue transplantation and concluded 
that the existing regulatory framework was insufficient. The 
review was undertaken in response to incidents in which 
imported foreign tissue had tested positive for serious 
diseases. The agency then notified the industry that it 
intended to make regulatory changes to strengthen the oversight 
of tissue banks. The changes were to be threefold: First, all 
tissue establishments would be required to register with the 
FDA; second, screening of potential donors would be expanded to 
require testing for the human variant of mad cow disease, 
syphilis, and other viruses; and third, a rule would be issued 
on the methods and controls used during the processing of human 
tissue.
    The hearing exposed dangerous practices of some tissue 
banks as well as the inadequacy of the regulatory framework. 
The Subcommittee heard testimony from the following witnesses: 
George F. Grob, Deputy Inspector General for Evaluation and 
Inspections, Office of the Inspector General, U.S. Department 
of Health and Human Services; P. Robert Rigney, Jr., Chief 
Executive Officer, American Association of Tissue Banks; 
William F. Minogue, M.D., Chairman of the Board of Directors, 
Washington Regional Transplant Consortium; Valerie J. Rao, 
M.D., Chief Medical Examiner, District Five, Leesburg, Florida; 
and Kathryn C. Zoon, Ph.D, Director, Center for Biologics 
Evaluation and Research, U.S. Food and Drug Administration.
    The testimony was deeply troubling. The Federal Government 
had no idea how many tissue banks were operating in the 
country. Prior to the hearing, the FDA estimated that there 
about 150, but approximately 350 tissue banks registered with 
the FDA when the registration requirement went into effect. 
That indicated that many tissue banks were operating with no 
Federal oversight whatsoever.
    There was also considerable testimony about the 
unacceptable practices of some tissue banks. For example, 
George F. Grob, Deputy Inspector General from the Department of 
Health and Human Services, testified about unscrupulous tissue 
banks that engaged in a practice in which tissues that 
initially tested positive for contamination were simply tested 
over and over again until the technicians achieved the negative 
result they wanted. Dr. William Minogue from the Washington 
Regional Transplant Consortium, testified that a Lions Eye 
Bank, which also participated in tissue recovery, accepted a 
donor who was 82 years old with a history of cancer.
    At the end of the hearing, Senator Collins concluded that 
the Federal Government's oversight was not adequate and that 
until the necessary resources were devoted to tissue oversight, 
``there are still going to be holes in the safety net of 
regulations.''

C. Cross-Border Fraud: Scams Know No Boundaries (June 14 and 15, 2001)

    Under Senator Collins' chairmanship, the Subcommittee 
conducted a 5-month investigation into the growing number of 
incidents of fraud directed at American consumers that 
originate in other countries. This emerging crime, known as 
cross-border fraud, takes many forms including foreign 
lotteries and fraudulent sweepstakes. As Senator Collins noted 
at the hearings, ``Foreign countries, and particularly Canada 
have, unfortunately, become major points of origin for lottery, 
sweepstakes and advance-fee-for-loan schemes that prey upon 
Americans, especially the elderly.'' Such criminals work 
principally through direct mail and telemarketing, commonly 
seeking to convince their victims that they have won millions 
of dollars in a lottery--but that this award can be collected 
only if the victims first pay certain ``attorneys fees'' or 
``back taxes'' on the sum. It is estimated that cross-border 
fraud costs American consumers millions of dollars every year. 
The Subcommittee's investigation culminated in 2 days of 
hearings.
    On the first day of hearings, the Subcommittee heard 
testimony from three senior citizens--Ann Hersom of Maine, 
Bruce Hathaway of Ohio and Julia Erb of Michigan--who were 
victims of cross-border scams. The victims had each lost 
thousands of dollars, and in one case, tens of thousands of 
dollars to devious telemarketers and clever mail solicitations. 
Mrs. Hersom, for example, testified that her 80-year-old 
husband, formerly a successful businessman, had fallen prey to 
the tactics of cross-border con artists. She estimated that he 
lost $20,000 to these schemes, and she described how 
devastating these losses had been to their family. The 
fraudulent pitchmen did not give up following the hearing, and 
have continued to send solicitations from illegal Canadian and 
Australian lotteries, as well as place numerous telemarketing 
calls each day.
    The second witness panel was comprised of three U.S. and 
Canadian law enforcement officials who placed the problem of 
cross-border fraud in perspective by describing the sweeping 
reach and the high volume and the growing number of cross-
border frauds, and described their agencies' efforts to combat 
these crimes. Detective Staff Sergeant Barry F. Elliot, Ontario 
Provincial Police of Ontario, Canada testified about an 
initiative called Phonebusters. The mandate of Phonebusters is 
to prosecute those involved in telemarketing fraud in Ontario 
and Quebec, and to facilitate prosecution by U.S. agencies 
through extradition, and under Canada's Competition Act. The 
Phonebuster's initiative highlights both the importance of 
international information sharing and of aggressive consumer 
education and awareness campaigns in combating cross-border 
fraud. Jackie DeGenova, Chief for Consumer Protection, Ohio 
Attorney General's Office explained the impact of cross-border 
fraud on Ohio residents from the perspective of a prosecutor 
who has a longstanding and effective working relationship with 
her Canadian counterparts.
    The Subcommittee also heard testimony from Lawrence E. 
Maxwell, Postal Inspector in Charge, Fraud, Child Exploitation, 
and Asset Forfeiture Division, U.S. Postal Inspection Service 
who discussed efforts aimed at stemming the flow of fraudulent 
solicitations and efforts made to educate the American 
consumer. Mr. Maxwell also testified about the U.S. Postal 
Inspection Service's work with its Canadian counterpart, Canada 
Post. Reiterating the need for cooperation, Senator Collins 
stated at the hearing, ``Clearly, it is important that U.S. and 
Canadian law enforcement authorities work together more closely 
in fighting cross-border fraud.''
    On the second day of hearings, the Subcommittee heard 
testimony from one panel of three witnesses. The Honorable 
William H. Sorrell, Attorney General of Vermont addressed the 
difficulties of fighting fraud across borders, noting the slow 
pace of extraditions under the Mutual Legal Assistance Treaty, 
the costs associated with witness travel, and also with hiring 
Canadian lawyers. Mary Ellen Warlow, Acting Deputy Assistant 
Attorney General, Criminal Division, U.S. Department of Justice 
discussed the number of telemarketing operations in Canada, and 
the success of joint U.S.-Canada working groups to combat 
cross-border fraud.
    The third witness, Hugh Stevenson, Associate Director, 
Planning and Information, Consumer Protection Bureau, Federal 
Trade Commission, testified about the importance of gathering 
information and sharing with appropriate U.S. and foreign law 
enforcement agencies on cross-border scams, and the 
difficulties of chasing money across borders. The FTC 
representative also testified about the need to make civil 
remedies more effective across borders.
    Senator Levin acknowledged the difficulties that law 
enforcement faces when chasing criminals across borders, noting 
that ``Telemarketers from Canada and other countries prey on 
elderly Americans causing significant financial loss and 
emotional distress. It is difficult for U.S. law enforcement 
agencies to respond across international lines and these 
criminals take advantage of that fact.''

D. Diabetes: Is Sufficient Funding Being Allocated To Fight This 
        Disease? (June 26, 2001)

    Diabetes is the leading cause of kidney failure, blindness 
in adults and amputations not related to injury. Diabetes costs 
more than $105 billion annually in the United States in health-
related expenditures. In fact, more than 1 out of every 10 
dollars spent on health care, and about 1 out of every 4 
Medicare dollars, are spent to treat people with diabetes. The 
hearing was held to examine the impact that juvenile diabetes 
has had on children and their families
    The burden of diabetes falls particularly heavily on 
children and young adults with type 1, or juvenile diabetes. 
Juvenile diabetes is the second most common chronic disease 
affecting children--and is one that children do not outgrow. 
Senator Collins noted at the hearing, ``I will never forget the 
words of a little boy who told me that his greatest wish was 
that, just once, he could take a day off from diabetes. Despite 
the fact that it might be his birthday or Christmas, or another 
important holiday, he could never take a day off from his 
disease.''
    In addition to gaining insight into the impact of diabetes 
on children's lives, the hearing was intended to highlight 
advances in the quest for a cure and the need for additional 
research. Senator Levin noted at the hearing, ``Research that 
is done for type 1 . . . can also help the even larger number 
of people who have type 2 diabetes. One of the most important 
aspects of diabetes research is embryonic stem cell research.''
    The first witness to testify was Mary Tyler Moore, who 
serves as the International Chairman of the Juvenile Diabetes 
Research Foundation, and who thanked Congress for increasing 
funding for diabetes research, testified about recent advances 
in diabetes research, and urged support for embryonic stem cell 
research. The Subcommittee also heard testimony from Kevin 
Kline, a Juvenile Diabetes Research Foundation board member and 
actor, who highlighted the fears of parents whose children 
suffer from diabetes. The third witness, actor Jonathan 
Lipnicki, testified on behalf of a friend, Tessa Wick, about 
her struggle with diabetes. Ms. Wick also urged support for 
embryonic stem cell research. Finally, the Subcommittee heard 
testimony by Captain James Lovell, a former NASA Astronaut, 
whose adult son was diagnosed with diabetes. Captain Lovell 
testified on the need to fund research opportunities that have 
not been pursued for lack of funding, and on the economic 
impact of diabetes on this country.
    The second panel included two researchers, Allen M. 
Spiegel, M.D., who serves as Director of the National Institute 
of Diabetes and Digestive and Kidney Diseases, National 
Institutes of Health, and Hugh Auchincloss, Jr., M.D., 
Professor of Surgery, Massachusetts General Hospital and 
Harvard Medical School. Dr. Spiegel explained what is currently 
known about diabetes' progression, and the scientific 
community's goals such as identifying the causes of diabetes, 
preventing the disease, reducing complications, and most 
importantly, finding a cure. Dr. Auchincloss discussed some 
promising advances in diabetes research carried out in 
Edmonton, Canada, involving cell transplantation. He then 
enumerated the work that remains to be done in this area before 
such research can have wide application, and explained what is 
entailed in embryonic stem cell research.
    The panel also included James Robbins, President and CEO of 
Cox Communications, whose daughter has diabetes, and Greg 
Brenneman, former Chief Operating Officer of Continental 
Airlines, whose son has diabetes. Mr. Robbins testified about 
the impact diabetes has had on his daughter and his family as a 
whole. He also testified from a business perspective about the 
financial sense it makes to fund the Juvenile Diabetes Research 
Foundation. Mr. Brenneman testified about the impact diabetes 
had on his young son and on his family. Mr. Brenneman testified 
that he had promised his son that he would help him find a cure 
for diabetes, and asked Congress to help him fulfill his 
promise to his son.
    The third panel of witnesses was made up of delegates to 
the Juvenile Diabetes Research Fund Children's Congress, and 
included Rachel Dudley, age 15 of Michigan; Andrew Webber, age 
13 of Maine; Eliza Jayne Kiley, age 5 of Pennsylvania, 
accompanied by her mother Michele Kiley; Daniel Thaller, age 12 
of North Carolina, accompanied by Jessica Thaller, age 13; and 
Caroline Rowley, age 11 of Texas. These witnesses discussed the 
impact diabetes has had on their daily lives, and on their 
aspirations for the future. They also urged Congress to 
continue funding diabetes research.

E. What is the U.S. Position on Offshore Tax Havens? (July 18, 2001)

    On July 18, 2001, under the chairmanship of Senator Levin, 
the Subcommittee held a hearing examining U.S. efforts to 
obtain information from offshore tax havens and the U.S. 
position regarding an ongoing project sponsored by the 
Organization of Economic Cooperation and Development (OECD), of 
which the United States is a member, to convince offshore tax 
havens to cooperate with inquiries made by OECD countries to 
detect, stop and prosecute tax evasion.
    Offshore jurisdictions typically are countries that allow 
corporations, trusts, or other businesses to be established 
within their territory on the condition that any business they 
conduct is only with persons who are ``offshore,'' meaning 
persons who are not citizens or domestic businesses operating 
inside the country. Offshore jurisdictions charge hefty fees 
for establishing and maintaining an offshore business, though 
they often charge little-to-no taxes. The offshore businesses 
are often shell operations established by attorneys, trust 
companies, or banks within the offshore jurisdiction operating 
under corporate secrecy laws that make it difficult to learn 
the true owner of a business. These offshore businesses also 
usually open accounts at banks licensed by the offshore 
jurisdiction and conduct financial transactions under bank 
secrecy laws that make it difficult to trace transactions or 
identify bank account owners. The money deposited in these 
banks is usually held, though, in correspondent accounts that 
the banks have opened at larger banks in the United States or 
other countries. Many of the offshore corporations and trusts 
serve as mere place holders for individuals who want to hide 
their identity and activities.
    Because many offshore jurisdictions have combined bank and 
corporate secrecy laws with weak bank regulation and anti-money 
laundering controls, they have become notorious for offshore 
operations engaged in money laundering, tax evasion, or other 
crimes. Numerous Subcommittee hearings over the years have 
examined these problems in offshore jurisdictions, the damage 
they cause to U.S. interests, and what can be done about them.
    The July hearing focused on the ongoing resistance of many 
offshore jurisdictions to divulging information needed to 
detect, stop, and prosecute tax evasion. For decades, the 
United States has been working with other countries, on a 
bilateral and multilateral basis, to improve the ability of 
U.S. tax officials to obtain information needed to enforce U.S. 
tax laws and stop tax evasion. Currently, the U.S. has a 
network of over 70 tax treaties and information exchange 
agreements with countries around the globe. But U.S. 
enforcement efforts have frequently been stymied by offshore 
tax havens refusing to release information about nonresidents 
operating under bank and corporate secrecy laws, resulting in 
an estimated U.S. revenue loss of $70 billion each year. U.S. 
allies have experienced similar problems. In response, with 
strong U.S. support, the OECD initiated, in 1998, a 
multilateral project which sought to identify uncooperative tax 
havens and convince them to change their ways.
    In June 2000, the OECD issued a report which identified 35 
countries as potentially ``uncooperative tax havens'' and 
stated that OECD members would take ``defensive measures'' 
against them unless, by July 2001, the listed countries had 
made written commitments to improving their cooperation with 
international tax enforcement efforts. Early in 2001, after his 
appointment to office, Secretary of the Treasury Paul O'Neill 
announced an internal review of the OECD project after 
expressing ``serious concerns'' about its direction. Secretary 
O'Neill later called for a ``refocused'' project, centered on 
``its core element: the need for countries to be able to obtain 
specific information from other countries upon request in order 
to enforce their respective tax laws.'' In June 2001, after the 
OECD agreed to certain revisions in the project to satisfy U.S. 
concerns, press reports indicated that the United States had 
renewed its support for the OECD project, while critics 
continued to oppose the project and some claimed the United 
States still opposed it.
    The July hearing examined the historic and ongoing lack of 
cooperation by some offshore jurisdictions with U.S. tax 
enforcement efforts and sought to clear up any confusion about 
U.S. support for the revised OECD tax haven project. Four 
witnesses testified about the ongoing failure of some tax 
havens, despite years of effort by the United States, to 
cooperate with U.S. tax enforcement efforts. These witnesses 
were the Honorable Robert M. Morgenthau, Manhattan District 
Attorney for New York; the Honorable Michael Chertoff, 
Assistant Attorney General for the Criminal Division, U.S. 
Department of Justice; and two former IRS Commissioners, the 
Honorable Sheldon Cohen, who served under President Johnson, 
and the Honorable Donald Alexander, who served under President 
Ford.
    Secretary O'Neill testified that he was firmly committed to 
taking forceful action to detect and stop tax evasion through 
tax havens. He testified that the United States supports the 
revised OECD tax haven project, the United States is prepared 
to impose sanctions on uncooperative tax havens that refuse to 
share information needed to enforce our tax laws, and the 
Treasury Department would support legislation to enable the 
United States to impose tax haven sanctions, if necessary. 
Secretary O'Neill also pledged to undertake a major effort to 
negotiate, within 1 year, bilateral tax treaties with certain 
tax havens that have historically resisted exchanging 
information with the United States to support U.S. tax 
enforcement. In July 2002, Secretary O'Neill informed the 
Subcommittee that he was able to negotiate ground-breaking 
treaties with several of these tax havens, including the Cayman 
Islands, British Virgin Islands, and Jersey.

F. Review of INS Policy on Releasing Illegal Aliens Pending Deportation 
        (November 13, 2001)

    On November 13, 2001, the Subcommittee held a hearing and 
took testimony from current and past U.S. Border Patrol 
employees about a troubling practice in which many persons 
arrested for attempted illegal entry into the United States in 
areas outside the normal ports of entry were released by the 
Border Patrol and the Immigration and Naturalization Service 
(INS) without bond and were allowed to move freely within the 
United States under no constraint other than a written 
instruction to appear at a hearing often scheduled months 
later.
    The U.S. Border Patrol, which serves as the uniformed law 
enforcement arm of the INS, is responsible for combating 
illegal entries into the United States at points other than 
ports of entry. Ports of entry, the only places where persons 
may legally enter the United States, are typically located at 
airports, bridges, and highways, and include facilities 
enabling INS officers and Customs agents to inspect persons, 
papers, and luggage. The hearing's focus was on persons 
arrested while trying to cross into the United States without 
subjecting themselves to inspection at a port of entry as 
required by law.
    The hearing presented evidence indicating that the majority 
of people who are arrested for attempted illegal entry into the 
United States and do not voluntarily return to their country, 
are released on their own recognizance, are allowed to move 
around the United States at will, do not appear at their 
removal hearing, and are rarely located or removed from the 
United States. Statistics for the Detroit Sector in Fiscal Year 
2001, for example, showed that the Border Patrol had arrested 
2,106 people, a significant percentage of whom were arrested 
while attempting to enter the country illegally. Of those 
2,106, slightly less than two-thirds voluntarily returned to 
their country of origin, while 773 were issued notices to 
appear at a removal hearing. Of the 773, 595 or more than 75 
percent were then released by the Border Patrol and INS on 
their own recognizance, without bond and many without 
undergoing a criminal background check, and allowed to move 
freely within the United States until the time of their 
hearing. While the INS did not keep statistics on how many of 
the 595 later appeared at the specified hearing, related 
statistics and estimates by former Border Patrol officials 
indicate that the percentage of arrested persons who were 
released without bond and did not appear at their hearing was 
at least 40 percent and possibly as high as 90 percent.
    The Subcommittee heard from two panels of witnesses 
consisting of INS and Border Patrol management, and Border 
Patrol officers on the front lines in two different sectors of 
the Border Patrol: The Detroit Sector which covers four 
States--Michigan, Ohio, Indiana and Illinois--and the Blaine 
Sector which covers Alaska, Oregon and the western half of the 
State of Washington. The first panel of witnesses included 
senior officials from the Border Patrol and INS: Michael 
Pearson, Executive Associate Commissioner for Field Operations, 
INS, accompanied by Gustavo DeLaVina, Chief, U.S. Border 
Patrol. The second panel included three current or former 
Border Patrol officers: Mark Hall, President, Local 2499, 
National Border Patrol Council, and Senior Border Patrol Agent, 
U.S. Border Patrol in Detroit, Michigan; Keith Olson, 
President, Local 2913, National Border Patrol Council and 
Senior Border Patrol Agent, U.S. Border Patrol in Bellingham, 
Washington; and Eugene Davis, Retired Deputy Chief Patrol 
Agent, Blaine Sector, U.S. Border Patrol in Blaine, Washington. 
The witnesses testified about the practice at issue, its 
justification, and the attendant security risks for the United 
States.
    At the hearing, Senator Levin asked the Border Patrol and 
INS to report on the steps they planned to take to close the 
identified enforcement loophole. The INS subsequently issued a 
memorandum requiring a criminal background check to be 
conducted on all arrested aliens prior to releasing them on 
bond or their own recognizance, but otherwise declined to 
change the procedures for handling persons who are arrested for 
attempted illegal entry into the United States and who decline 
to return to their country of origin. To further address the 
enforcement problem identified in the Subcommittee hearing, 
Senator Levin added two provisions to the Enhanced Border 
Security and Visa Entry Reform Act, which was enacted into law 
in 2003, to strengthen U.S. border controls. One of these 
provisions requires the U.S. Department of Justice to provide 
Congress with an annual report on the number of aliens arrested 
outside ports of entry who were served a notice to appear for a 
removal hearing, were released on recognizance, and then failed 
to attend their removal hearing. This data was requested to 
obtain additional information on the scope of the enforcement 
problem. The second Levin provision increased training 
opportunities for Border Patrol agents.

G. Gas Prices: How Are They Really Set? (April 30 and May 2, 2002)

    In June 2001, due to concerns about gasoline price 
volatility, the suddenness with which gasoline prices can rise, 
a pattern of local gasoline prices rising and falling in 
tandem, and the importance of reasonably priced gasoline to the 
U.S. economy, Senator Levin initiated an in-depth Subcommittee 
investigation into the factors behind the pricing of retail 
gasoline. In April 2002, the Subcommittee issued a 400-page 
staff report and, in April and May, held hearings detailing how 
U.S. retail gasoline prices are set. The report showed how oil 
industry mergers, refinery closings, and increasingly ``tight'' 
gasoline supplies had increased market concentration and given 
some refiners sufficient market power to reduce gasoline 
supplies and increase gasoline prices. Other factors leading to 
higher prices and spikes in the Midwest included regional 
pipeline limitations, price variations from different fuels, 
and the practice of ``parallel pricing'' in which retailers 
looked to competitors to set gasoline prices.
    The hearings, which took place over 2 days, took testimony 
from top executives at five major oil companies, State 
regulators, and experts on crude oil markets, gasoline pricing, 
and antitrust law. On the first day of the hearings, the 
Subcommittee heard from representatives of five major oil 
companies: James Carter, Regional Director for the United 
States, ExxonMobil Fuels Marketing Company; Gary R. Heminger, 
President, Marathon Ashland Petroleum; Ross J. Pillari, Group 
Vice President--U.S. Marketing, BP; David C. Reeves, President 
of North American Products, ChevronTexaco Corporation; and Rob 
Routs, President and CEO, Shell Oil Products U.S. These 
witnesses described how they price gasoline and answered 
questions about price spikes, parallel price increases, and 
actions taken by oil companies that appear to influence prices.
    On the second day of hearings, the Subcommittee heard first 
from Senator Ron Wyden (D-Oregon) who has spent years examining 
gasoline prices. The next panel of witnesses consisted of three 
senior State officials who had experience challenging gasoline 
price increases in their States: The Honorable Richard 
Blumenthal, Attorney General for the State of Connecticut; the 
Honorable Jennifer Granholm, Attorney General for the State of 
Michigan; and Tom Greene, Senior Assistant Attorney General for 
Antitrust, California Department of Justice. Finally, the 
Subcommittee heard testimony from five experts on gasoline 
markets and antitrust law: Peter Ashton, President, Innovation 
and Information Consultants, Inc.; Dr. Justine S. Hastings, 
Assistant Professor of Economics, Dartmouth College; Dr. R. 
Preston McAfee, Murray Johnson Professor of Economics, 
University of Texas; and Dr. Philip Verleger, Jr., President, 
PK Verleger, LLC.
    Following the hearings, Senator Levin urged the 
Administration to take certain specific actions to protect the 
availability of gasoline and the reasonableness of its price, 
including the development of uniform gasoline specifications 
and the assignment of adequate resources to the Energy 
Information Administration to provide timely data on energy 
markets. Senator Levin asked the Federal Trade Commission to 
scrutinize future proposed oil industry mergers for their 
impact on market concentration and on U.S. gasoline prices, 
storage, and transportation. He also asked the Environmental 
Protection Agency to review the effects of reformulated 
gasoline on prices and requested a GAO report on the impact of 
oil industry mergers on gasoline prices. Finally, he initiated 
a second phase of the Subcommittee's investigation to examine 
the pricing of crude oil which, in turn, affect not only the 
price of gasoline, but also home heating oil, jet fuel, diesel 
fuel, and other key fuels important to consumers.

H. The Role of the Board of Directors in Enron's Collapse (May 7, 2002)

    In January 2002, Senator Levin announced a bipartisan 
investigation into issues related to the collapse of Enron 
Corporation, which had once been the seventh largest company in 
the United States, abruptly declared bankruptcy on December 2, 
2001, and was subsequently discovered to have been involved in 
a litany of corporate abuses from deceptive accounting to price 
manipulation, insider dealing, and tax evasion. Working as a 
team, the Majority and Minority staffs of the Subcommittee 
conducted the most in-depth Enron investigation undertaken by 
any Congressional committee. Their efforts included reviewing 
over 2 million pages of documents, conducting over 100 
interviews, preparing for 4 days of hearings, and drafting two 
Subcommittee reports. The investigation exposed how Enron used 
complex financial transactions to dishonestly report better 
financial results than the company actually experienced, 
thereby misleading investors, employees, and others who 
suffered substantial losses. It also exposed actions taken by 
the Enron Board of Directors and major U.S. financial 
institutions that failed to halt, and in some cases 
facilitated, Enron's misconduct.
    The Subcommittee held its first Enron hearing on May 7, 
2002. This hearing focused on the role of the Enron Board of 
Directors in the collapse of the company. The first panel of 
witnesses consisted of five current or former members of the 
Enron Board of Directors: Norman Blake, current Chairman of the 
Enron Board and former member of the Finance and Compensation 
Committees; John Duncan, former Chairman of the Executive 
Committee; Herbert Winokur, Jr., former Chairman of the Finance 
Committee; Robert Jaedicke, former Chairman of the Audit and 
Compliance Committee; and Dr. Charles LeMaistre, former 
Chairman of the Compensation and Management Development 
Committee. The second panel of witnesses consisted of experts 
on accounting and corporate governance: Michael Sutton, former 
Chief Accountant of the Securities & Exchange Commission from 
1995 until 1998; Charles Elson, Director of the Center for 
Corporate Governance at the University of Delaware; and Robert 
Campbell, former Chairman and CEO at Sunoco, Inc. and current 
member of the Board at Hershey Foods, CIGNA, and Pew Charitable 
Trusts.
    Two months later, on July 8, 2002, the Subcommittee 
released a bipartisan report containing findings and 
recommendations regarding the role of the Enron Board of 
Directors. The Subcommittee report found that the Enron Board 
of Directors had failed to safeguard Enron shareholders and had 
contributed to the company's collapse by allowing Enron to 
engage in high-risk accounting practices, inappropriate 
conflict of interest transactions, extensive undisclosed off-
the-books activities, and excessive executive compensation. The 
report also found that Enron Board members had refused to admit 
any missteps, mistakes, or responsibility for the company's 
demise.
    The Subcommittee report also presented a number of 
recommendations to strengthen boardroom oversight and curb 
excessive compensation, deceptive accounting and other 
corporate misconduct. These bipartisan recommendations included 
strengthening audit committee expertise and independence, 
urging the compensation committee to stop excessive 
compensation, prohibiting high-risk accounting and conflict of 
interest transactions, and ending the practices of using 
corporate funds to make personal loans to officers and 
directors. Most of these recommendations were subsequently 
included in reforms made to the listing requirements of the New 
York Stock Exchange or in the Sarbanes-Oxley Act which became 
law in July 2002.

I. The Role of the Financial Institutions in Enron's Collapse (July 23 
        and 30, 2002)

    A second focus of the Subcommittee's investigation into 
Enron's collapse was to examine the role played by major U.S. 
financial institutions and to determine whether and to what 
extent some of these institutions contributed to the company's 
deceptive practices. These hearings, which were held in July 
and December 2002, presented evidence that Citigroup, J.P. 
Morgan Chase, Merrill Lynch, and other major U.S. financial 
institutions had not only participated in, but at times 
designed, advanced, and profited from, complex financial 
transactions explicitly intended to help Enron engage in 
deceptive accounting or tax strategies.
    The first set of these hearings, held in July 2002, took 
place over 2 days and examined transactions involving Enron and 
three financial institutions, Citigroup, J.P. Morgan Chase and 
Co. (``Chase''), and Merrill Lynch. Each of the transactions 
examined in the July hearings resulted in misleading 
information in Enron's financial statements that made Enron 
appear to be in better financial condition than it was.
    The first day of the July hearings looked at more than $8 
billion in deceptive transactions referred to as ``prepays,'' 
which Citigroup and Chase used to issue Enron huge loans 
disguised as commodity transactions. By characterizing the 
transactions as commodity transactions rather than loans, 
Citgroup and Chase enabled Enron to claim the loan proceeds 
were cash flow from business operations rather than cash flow 
from financing, thereby misleading investors and analysts about 
the nature of Enron's incoming cash flow.
    The Subcommittee heard from several panels of witnesses. 
The first panel consisted of Robert L. Roach, Counsel and Chief 
Investigator of the Permanent Subcommittee on Investigations, 
who led the Subcommittee's investigation of Enron. He was 
accompanied by Gary M. Brown, Special Counsel to the Minority, 
Committee on Governmental Affairs, who had assisted the 
Subcommittee's investigation. Mr. Roach summarized the 
Subcommittee's investigation and findings. The second panel 
consisted of an accounting expert and several representatives 
of Moody's Investors Service and Standard & Poor's examining 
the misleading accounting used to depict the transactions and 
the significance for Enron's financial statements and credit 
analysis. These witnesses included Lynn Turner, former Chief 
Accountant of the Securities & Exchange Commission; Pamela 
Stumpp, Managing Director and Chief Credit Officer in the 
Corporate Finance Group, accompanied by John Diaz, Managing 
Director in the Power & Energy Group, from Moody's Investors 
Service; and Ronald Barone, Managing Director in the Utilities, 
Energy Project Finance Group, Corporate and Government Ratings, 
accompanied by Nik Khakee, Director of the Structured Finance 
Group from Standard & Poor's.
    The third panel consisted of representatives from J.P. 
Morgan Chase: Jeffrey Dellapina, Managing Director of JPMorgan 
Chase Bank in New York, accompanied by Donald McCree, Managing 
Director at J.P. Morgan Securities, Inc. in New York, and 
Robert Traband, Vice President of JPMorgan Chase Bank in 
Houston.
    The final panel in the first day of hearings consisted of 
representatives from Citigroup: David Bushnell, Managing 
Director of Global Risk Management for Salomon Smith Barney/
Citigroup, in New York; James Reilly, Jr., Managing Director of 
Global Power & Energy Group, Salomon Smith Barney/Citigroup, in 
Houston; Richard Caplan, Managing Director and Co-Head, Credit 
Derivatives Group, Salomon Smith Barney North American Credit/
Citigroup, in New York; and Maureen Hendricks, Senior Advisory 
Director, Salomon Smith Barney/Citigroup, in New York.
    The second day of the July hearings examined a sham asset 
sale of Nigerian power barges from Enron to Merrill Lynch just 
before the end of the year 2000, which allowed Enron to claim 
the alleged ``sale'' revenue on its 2000 financial statements 
and boost its year-end earnings. The hearing showed that this 
transaction did not qualify as a true sale under accounting 
rules, because Enron had eliminated all risk from the deal by 
secretly promising Merrill Lynch to arrange a resale of the 
assets within 6 months and guaranteeing a 15 percent return on 
the deal. The Subcommittee heard from two panels of witnesses 
representing Merrill Lynch. The first panel consisted of two 
Merrill Lynch investment bankers who were involved in the barge 
transaction and who invoked their Fifth Amendment rights and 
were excused from testifying: Robert Furst, former Managing 
Director of Merrill Lynch & Co., in Dallas; and Schuyler 
Tilney, Managing Director of Global Energy & Power, in Global 
Markets & Investment Banking, at Merrill Lynch & Co., in 
Houston. The Subcommittee then heard from G. Kelly Martin, 
Senior Vice President and President of International Private 
Client Division at Merrill Lynch in New York.
    Substantial evidence presented at the July hearings showed 
that the financial institutions involved in the transactions 
with Enron were fully aware of the significance of their 
actions--they structured the deals, signed the paperwork, 
supplied the financing, and even established new special 
purpose entities for the transactions knowing that Enron was 
using the transactions to report that the company was in better 
financial condition than it really was. In the case of 
Citigroup and Chase, the banks not only assisted Enron, they 
developed the deceptive prepays as a financial product and sold 
it to other companies as so-called ``balance sheet friendly'' 
financing, earning millions in fees.
    Subsequent to the hearing, without admitting guilt, Merrill 
Lynch paid $80 million to the Securities & Exchange Commission 
and the U.S. Department of Justice to resolve potential 
liability related to the Nigerian barge deal and another 
transaction with Enron. Citibank and Chase announced that they 
would strengthen their internal procedures to prevent future 
participation in transactions resulting in misleading 
accounting on a client's financial statements. Investigations 
are ongoing of Citigroup and Chase's transactions with Enron by 
the Securities & Exchange Commission and U.S. Department of 
Justice.

J. Oversight of Investment Banks' Response to the Lessons of Enron 
        (December 11, 2002)

    On December 11, 2002, the Subcommittee held a third day of 
hearings examining the role played by some major U.S. financial 
institutions in Enron's collapse. The December hearing focused 
on four multi-million dollar structured finance transactions 
known as Fishtail, Bacchus, Sundance, and Slapshot, involving 
Enron, Citigroup, and J.P. Morgan Chase (``Chase''). These 
transactions had taken place over a 6-month period beginning in 
December 2000 and ending in June 2001. All four transactions 
related to a new business venture by Enron involving pulp and 
paper trading. All four had been financed primarily by the 
Salomon Smith Barney unit of Citigroup or by Chase. The hearing 
presented evidence showing that Citigroup and Chase actively 
aided Enron in executing the four transactions, despite knowing 
the transactions utilized deceptive accounting or tax 
strategies, in return for substantial fees or favorable 
consideration in other business dealings.
    The Subcommittee heard from four panels of witnesses, 
including Citigroup and Chase officials, a banking and 
securities expert, and key Federal agencies.
    The first panel consisted of Citigroup officials who were 
directly involved in the Bacchus and Sundance transactions, as 
well as a senior Citigroup official responsible for setting 
corporate policy. The Citigroup witnesses were Charles Prince 
III, Chairman and Chief Executive Officer of Citigroup's Global 
Corporate and Investment Bank; David Bushnell, Managing 
Director of Global Risk Management for Citigroup/Salomon Smith 
Barney; Richard Caplan, Managing Director and Co-Head of the 
Credit Derivatives Group at Salomon Smith Barney North American 
Credit/Citigroup; and William Fox III, Managing Director of the 
Global Power and Energy Group at Citibank. Mr. Caplan 
participated directly in both the Bacchus and Sundance 
transactions. Mr. Fox was directly involved in the Bacchus 
transaction and was the key Citigroup official who communicated 
with Enron's chief accountant, Andrew Fastow, regarding the 
verbal guarantee of the ``equity investment'' in the Caymus 
Trust. Mr. Bushnell, as head of risk management, was directly 
involved in the Sundance transaction. At the hearing, Mr. 
Bushnell disclosed that, although he had strongly urged 
Citigroup not to participate in Sundance, he may have provided 
the final oral approval that allowed this project to proceed. 
Mr. Prince, who was not directly involved in either 
transaction, described a number of Citigroup's post-Enron 
reforms, including a new corporate policy to prevent 
Citigroup's participation in any transaction in which the 
transaction's net effect is not accurately disclosed to a 
company's investors and analysts.
    The second panel consisted of Chase officials who were 
directly involved in the Fishtail and Slapshot transactions, as 
well as senior officials responsible for setting Chase's 
corporate policy. The Chase officials were Michael Patterson, 
Vice Chairman of J.P. Morgan Chase and Company; Andrew 
Feldstein, Managing Director and Co-Head of Structured Products 
and Derivatives Marketing at J.P. Morgan Chase and Company; 
Robert Traband, Vice President of J.P. Morgan Chase and Company 
in Houston, accompanied by Eric Peiffer, Vice President of J.P. 
Morgan Chase and Company in New York. Mr. Peiffer played a key 
role in developing and marketing the Slapshot tax structure. 
Mr. Peiffer and Mr. Traband dealt directly with Enron to design 
and carry out the Slapshot transaction examined in this report. 
Mr. Feldstein, who was not directly involved in Slapshot and is 
the new head of the Chase division carrying out structured 
finance and derivatives transactions, described Chase's renewed 
commitment to the principles of integrity and transparency in 
its structured finance and derivative transactions. Mr. 
Patterson, who was also not directly involved in Slapshot, 
described a number of Chase's post-Enron reforms, including a 
new transaction review committee, which he heads, to prevent 
Chase's participation in transactions that facilitate deceptive 
accounting or carry other reputational risks. The Chase 
witnesses also testified at the hearing that Chase would no 
longer market the Slapshot tax structure or participate in 
transactions similar to Slapshot.
    The third panel at the hearing consisted of testimony from 
Muriel Siebert, Muriel Siebert and Company, Inc., who was the 
first woman member of the New York Stock Exchange, the first 
woman Supervisor of Banking for the State of New York, and the 
current Owner and President of a brokerage house. Ms. Siebert 
testified that, since Enron's collapse, her business had seen 
individual investors leave the stock market altogether because 
``they did not trust the system.'' She expressed great concern 
about the deceptive transactions discussed in the hearing and 
the need to initiate reforms to prevent U.S. financial 
institutions from facilitating deceptive accounting or tax 
transactions.
    The fourth and final panel consisted of top Federal 
regulators at the Federal Reserve, Securities & Exchange 
Commission (``SEC''), and Office of the Comptroller of the 
Currency (``OCC''). The witnesses were Richard Spillenkothen, 
Director of the Division of Banking Supervision and Regulation 
at the Federal Reserve; Annette Nazareth, Director of the 
Division of Market Regulation at the SEC; and Douglas Roeder, 
Senior Deputy Comptroller for Large Bank Supervision at the 
OCC. These witnesses indicated that a relatively small universe 
of financial institutions--for example, less than ten of the 
national banks overseen by the OCC--engage in the type of 
complex structured finance transactions examined by the 
Subcommittee. They also acknowledged a regulatory gap that now 
exists in overseeing these transactions, since the SEC does not 
generally regulate banks, and the bank regulators do not 
generally oversee accounting practices. All three witnesses 
agreed that banks should not ``engage in borderline 
transactions that are likely to result in significant 
reputational or operational risks to the banks.''
    Following the hearing, on January 2, 2003, the Subcommittee 
issued a bipartisan report detailing the four transactions and 
calling on Federal securities and bank regulators to stop U.S. 
financial institutions from aiding and abetting dishonest 
accounting. The report presented several recommendations 
focused on coordinated action by the SEC and bank regulators to 
bridge a current gap in Federal oversight that exists because 
the SEC does not generally regulate banks, and bank regulators 
do not generally regulate accounting practices overseen by the 
SEC. The recommendations included calling for a joint review of 
structured finance products and transactions to identify those 
that facilitate deceptive accounting, an SEC policy statement 
making it clear that the SEC would take enforcement action 
against a financial institution that offers deceptive financial 
products or participates in deceptive transactions, and a 
policy statement by bank regulators making it clear that bank 
examiners, as part of their routine bank examinations, may 
evaluate a bank's structured finance activities and declare 
problematic products or activities an unsafe and unsound 
banking practice.

         III. Legislative Activities During the 107th Congress

    The Permanent Subcommittee on Investigations does not have 
legislative authority, but because its investigations play an 
important role in bringing issues to the attention of Congress 
and the public, the Subcommittee's work frequently contributes 
to the development of significant legislative initiatives. The 
Subcommittee's activity during the 107th Congress was no 
exception, with Subcommittee hearings and Members playing 
prominent roles in the development of a number of legislative 
initiatives.

A. Money Laundering Abatement Act

(S. 1371--by Senators Levin, Grassley, Sarbanes, Kyl, DeWine, Bill 
        Nelson, Durbin, Stabenow and Kerry)

    Following a 3-year Subcommittee investigation, 4 days of 
Subcommittee hearings, and two staff reports on money 
laundering problems affecting private banking and correspondent 
banking practices in the United States, on August 3, 2001, 
Senators Levin, Grassley, and others introduced the Money 
Laundering Abatement Act, S. 1371, to correct many of the 
problems identified in the Subcommittee's work. Among other 
provisions, S. 1371 contained language barring U.S. banks from 
opening accounts for foreign shell banks, requiring U.S. banks 
to use enhanced due diligence before opening accounts for 
foreign offshore banks and private banking accounts for wealthy 
foreign individuals or political figures, strengthening the 
ability of U.S. law enforcement to subpoena records related to 
foreign bank correspondent accounts and to freeze and seize 
criminal proceeds from these accounts, expanding the list of 
foreign crimes triggering a U.S. money laundering offense to 
include foreign corruption offenses, and strengthening the 
ability of U.S. prosecutors to prosecute money laundering cases 
involving foreign banks, corporations, or individuals. After 
the terrorist attack of September 11, 2001, S. 1371 formed the 
basis for the anti-money laundering provisions in Title III of 
the USA Patriot Act, and nearly all of its provisions were 
expanded and enacted into law when the USA Patriot Act, H.R. 
3162, was signed by President Bush on October 26, 2001, at a 
White House signing ceremony.

B. Shareholder Bill of Rights Act

(S. 2460--by Senator Levin)

    During the Subcommittee's year-long investigation into 
corporate misconduct at Enron Corporation, on May 6, 2002, 
Senator Levin introduced the Shareholder Bill of Rights Act, S. 
2460, to address a number of the problems identified in the 
Subcommittee's Enron investigation. Among other provisions, S. 
2460 contained language to strengthen the process for issuing 
corporate accounting standards by providing an independent 
source of funding for the organization that issues them, the 
Financial Accounting Standards Board; strengthen auditor 
independence by barring an audit firm from auditing its own 
work and from providing non-auditing services to a company 
during a specified period; strengthen corporate accounting by 
requiring corporate audit committees to oversee companies' 
accounting practices and prohibiting companies from improperly 
influencing or misleading an auditor; require shareholder 
approval of any stock option compensation plan not shown on 
company financial statements as an expense; direct the SEC not 
to prohibit shareholder proposals permitted under State law to 
remove a director or outside auditor; bar preferential 
treatment by companies of officer or director compensation when 
during a company bankruptcy; and strengthen disclosure of 
company loans to directors and officers and company 
transactions involving persons affiliated with a board member. 
A number of the provisions in S. 2460, or provisions adopting 
similar requirements, were included in a Senate corporate 
reform bill, S. 2673, which was enacted into law as H.R. 3763, 
the Sarbanes-Oxley Act. Other provisions in the Sarbanes-Oxley 
Act, such as Section 402 barring company-financed loans to 
corporate officers and directors, also drew in part on the 
Enron investigation conducted by the Subcommittee.

C. United States Postal Service Commission Act of 2002

(S. 2754--by Senator Collins)

    On July 18, 2002, Senator Collins introduced the ``United 
States Postal Service Commission Act of 2002.'' This 
legislation was designed to establish a Commission to examine 
the challenges facing the Postal Service, and develop solutions 
to ensure its long term viability and increased efficiency. The 
Commission was also charged with developing specific 
recommendations and legislative proposals that Congress and the 
Postal Service can implement.
    Senator Collins introduced this legislation in response to 
the Postal Services' ballooning liabilities, billion dollar 
losses and shrinking revenue sources. At the same time, the 
Postal Service delivers more than 200 billion pieces of mail 
each year to nearly 140 million addresses, a number that is 
growing to the tune of 1.7 million new addresses each year. In 
addition, the Postal Service delivers mail to every customer, 6 
days a week at affordable rates. Most commercial enterprises 
would find it uneconomical, if not impossible, to deliver mail 
and packages to many areas at rates that the Postal Service has 
been offering.
    Moreover, the Postal Service is the eleventh largest 
enterprise in the Nation with $66 billion in annual revenue. 
The Postal Service itself employs more than 700,000 career 
employees, and is the linchpin of a $900 billion mailing 
industry that employs nine million Americans in fields as 
diverse as direct mailing, printing, and paper production.
    The Commission was to be comprised of leaders from 
business, academia and other fields to consider all relevant 
aspects of the Postal Service. The Commission was to be given 1 
year to carry out its study and produce legislative proposals 
for consideration by the Administration and the Congress.
    S. 2754 was referred to the Senate Governmental Affairs 
Committee, but no Committee action was taken on the bill. On 
December 11, 2002, President George W. Bush established a 
Commission on the Postal Service with a mandate and makeup 
similar to that outlined in S. 2754.

D. National Fraud Against Senior Citizens Awareness Week

(S. Res. 281--by Senators Collins and Levin)

    On June 5, 2002, Senator Collins and Senator Levin 
introduced a resolution designating the week of August 25, 2002 
``National Fraud Against Senior Citizens Awareness Week.'' The 
resolution passed the Senate by unanimous consent on June 27, 
2002 with 20 bipartisan cosponsors.
    This resolution was designed to draw attention to the 
Postal Service's and U.S. Postal Inspection Service's efforts 
to increase public awareness of mail, Internet, and 
telemarketing schemes that target elderly Americans. It is 
through increased awareness on the part of seniors, their 
families, and their caregivers that such schemes, which rob 
seniors not only of their hard-earned savings but of their 
dignity and self respect, can best be prevented.
    The comprehensive effort included posters hung in post 
office lobbies nationwide to highlight the problem and inform 
seniors and their families about the steps they can take to 
protect themselves and report fraud.
    The campaign also included newspaper advertisements in the 
13 States and public service announcements by national 
spokesperson Betty White on the television and radio. Finally, 
in an effort to reach those seniors who may leave their homes 
infrequently, the Postal Service included inserts alerting 
seniors to fraudulent schemes with the stamps that individuals 
purchase by mail.

E. Human Tissue Transplant Safety Act of 2002

(S. 2531--by Senators Collins, Clinton, and Durbin)

    In May 2002, Senator Collins introduced S. 2531, ``The 
Human Tissue Transplant Safety Act of 2002.'' The legislation 
was a direct result of the Subcommittee's investigation. The 
bill was designed to grant explicit authority to the Food and 
Drug Administration (FDA) to conduct oversight of tissue 
establishments, which includes any entity engaged in the 
recovery, screening, testing, processing, storage, or 
distribution of human tissue or tissue-based product.
    Another provision in the bill requires mandatory adverse 
event reporting. Under the current regulatory structure, tissue 
entities are not required to report defined adverse events 
which can make it very difficult for the FDA to assess the 
extent of a public health problem. Moreover, in addition to the 
mandatory reporting requirement, there is also a provision in 
the bill that calls for the creation on a centralized database 
that would contain the reports. Clearly, there is a need for a 
centralized repository for adverse events since the donated 
tissue may be obtained in one State, sent to another for 
processing, and may be used in a surgical procedure in still 
another State. Another benefit of a centralized database would 
be the accessability of the information to both the FDA and the 
Centers for Disease Control and Prevention (CDC). The CDC 
currently does not have timely access to the information and 
must instead rely on information it solicits from the FDA and 
State health departments. Tissue entities conducting business 
in the United States would be required to register with the FDA 
and failure to do would result in a violation.

                    IV. Reports, Prints, and Studies


A. Correspondent Banking: A Gateway For Money Laundering (February 5, 
        2001); Supplement to the February 5, 2001 Report On 
        Correspondent Banking: A Gateway For Money Laundering (Case 
        Histories 8, 9, and 10) (February 28, 2001) (Reports prepared 
        by the Minority Staff and reprinted in S. Hrg. 107-84)

    In February 2001, the Subcommittee issued two Minority 
staff reports on ``Correspondent Banking: A Gateway For Money 
Laundering,'' describing the results of a year-long 
investigation led by Senator Levin into how U.S. banks were 
being used by foreign banks to launder the proceeds of criminal 
activity. The reports, which are meant to be read as a single 
document and together exceed 450 pages, provide an inside look 
into the operations of ten foreign banks that have used major 
U.S. banks to move and launder millions of dollars obtained 
through drug trafficking, financial frauds, bribes, tax 
evasion, and illegal gambling operations.
    This correspondent banking report was completed as part of 
a larger anti-money laundering investigation initiated by 
Senator Levin in 1999, and was released in connection with 
Subcommittee hearings held on this topic in March 2001. The 
report was based on the review of thousands of documents 
produced by banks, financial regulators, law enforcement, 
courts, and others, as well as numerous interviews of 
individuals personally involved in money laundering operations, 
U.S. and foreign bank owners and employees, U.S. and foreign 
financial regulators and law enforcement officials, and banking 
and money laundering experts. The report also included the 
results of a survey sponsored by Senator Levin of 20 banks that 
offer U.S. correspondent banking services to other banks.
    The report presented ten detailed case histories explaining 
how a particular foreign bank was able to open accounts and 
obtain services from a U.S. bank, despite having a questionable 
background or operating in a jurisdiction known for weak anti-
money laundering controls; how that foreign bank misused its 
U.S. accounts to launder criminal proceeds; and what oversight 
was exercised by the U.S. bank to detect and report suspicious 
activity. The profiled foreign banks included four shell banks 
and six offshore banks in various Caribbean, Latin American, 
European, and South Pacific jurisdictions. The U.S. banks 
included both major U.S. financial institutions as well as U.S. 
offices of major foreign banks.
    One case history involved a small offshore bank, British 
Trade and Commerce Bank (BTCB), which began operations in 1997. 
Despite its status as a new offshore bank in a small Caribbean 
jurisdiction known for weak anti-money laundering controls, 
BTCB was able, within 3 years, to open accounts at several U.S. 
banks and move more than $85 million through them, including 
millions of dollars associated with financial frauds and 
illegal gambling operations. Another small offshore bank in the 
Caribbean, American International Bank (AIB), facilitated and 
profited from financial frauds in the United States for 5 
years, laundering millions of dollars through correspondent 
accounts at major U.S. banks, before collapsing from insider 
abuse and a sudden withdrawal of deposits. The report showed 
that AIB also enabled even smaller, offshore shell banks to 
gain access to the U.S. banking system by allowing them to open 
an account with AIB and then use AIB's bank accounts in the 
United States. A third small offshore bank, British Bank of 
Latin America (BBLA), closed its doors after being named in two 
separate U.S. money laundering stings. This bank, which was 
licensed in the Caribbean but accepted clients only from 
Colombia, operated as an affiliate of a major bank in London 
and had accounts at a major U.S. bank in New York. Although all 
of the banks involved knew that BBLA provided U.S. dollar 
accounts to Colombian nationals, neither BBLA, its London 
affiliate, nor its U.S. correspondent bank took any steps to 
guard against the accounts being misused on the Colombian Black 
Market Peso Exchange to launder U.S. dollars obtained from 
illegal drug trafficking. The result was that BBLA's U.S. 
accounts became a conduit for illegal drug money.
    In addition to detailing the ten case histories, the report 
described a number of other money laundering problems involving 
U.S. correspondent accounts opened for foreign banks. These 
problems included difficulties associated with freezing and 
seizing suspect funds deposited into these accounts, obtaining 
reliable and complete information related to the foreign banks, 
their customers and accounts, and tracking multiple wire 
transfers of funds from one bank to another across 
international borders. The report also included information 
provided by a former offshore bank owner explaining how he 
helped his U.S. clients avoid scrutiny and hide their offshore 
funds.
    The report also contained specific findings and 
recommendations. The report found that U.S. correspondent 
banking had become a significant gateway for rogue foreign 
banks and their criminal clients to carry on money laundering 
and other criminal activity in the United States and to benefit 
from the safety and soundness of the U.S. banking industry. It 
found that foreign offshore banks, shell banks, and banks in 
jurisdictions with weak anti-money laundering controls carried 
particularly high money laundering risks, yet U.S. banks were 
routinely establishing correspondent relationships with such 
banks and exercising little oversight of their accounts. The 
report found that most U.S. banks did not have adequate anti-
money laundering safeguards in place with respect to 
correspondent banking, and this problem was longstanding, 
widespread and ongoing. It also found that, in the prior 3 
years, some U.S. banks had become concerned about the 
vulnerability of correspondent banking to money laundering and 
begun taking steps to reduce the money laundering risks, but 
these steps were slow, incomplete, and not industry-wide.
    The report offered a number of recommendations to 
strengthen U.S. anti-money laundering laws and banking 
practices in the correspondent banking field. Many of these 
recommendations were included in the Money Laundering Abatement 
Act, S. 1371, introduced by Senator Levin and others during the 
107th Congress. This bill, in turn, formed the basis for the 
anti-money laundering provisions contained in Title III of the 
USA Patriot Act and enacted into law in October 2001, as 
explained earlier.

B. Property ``Flipping'': HUD's Failure To Curb Mortgage Fraud 
        (September 25, 2001) (Report prepared by the Minority Staff) S. 
        Prt. 107-44

    On September 25, 2001, the Subcommittee issued a Minority 
Staff report on ``Property `Flipping': HUD's Failure To Curb 
Mortgage Fraud,'' which was the result of a 9-month 
investigation. The term refers to the purchase and quick resale 
of a home at a huge mark-up, often with little work done to 
improve the property, in order to create the false illusion of 
a robust real estate market though the use of phony paperwork 
and deceptive sales practices. The practice of ``flipping'' 
poses significant risks to low-income, first-time home buyers, 
and may affect the overall stability of a neighborhood.
    During the Subcommittee's investigation, staff 
investigators interviewed over 100 witnesses, including home 
buyer victims, real estate brokers, lenders, and attorneys 
involved in mortgage flipping cases, as well as government 
officials, community activists, and other stakeholders. These 
investigative efforts confirmed that the phenomenon of flipping 
is not simply a local, State, or even regional problem. It is, 
rather, a significant nationwide problem.
    Although the purchase and quick resale of a house at an 
increased price are not in and of themselves unlawful, the 
practice can cross into illegality when documents are falsified 
in order to lure lenders or buyers into investing more money in 
a house than it is actually worth. In order to finance the 
transaction, such unscrupulous sellers may also make 
arrangements to secure a mortgage that is insured by the 
Federal Housing Authority (FHA). The principal advantage to 
having an FHA-backed mortgage is that if the buyer defaults, 
the government will reimburse the lender for almost the entire 
amount of the loan. As a result, where the FHA backs mortgages, 
there is minimal risk in lending money to marginally qualified 
borrowers. Designed as a means to facilitate loans to low-
income families with little credit history, this system is 
sometimes subject to abuse where unscrupulous sellers are 
concerned: Too often, the process results in the Federal 
Government either insuring questionable loans or simply 
subsidizing mortgage fraud.
    The Subcommittee's investigation culminated in 2 days of 
oversight hearings on June 29 and 30, 2000. Among the witnesses 
who testified were three purchasers of flipped homes: Lisa 
Smith, a New York City police officer, and single mother; Sonia 
Pratts, a health care assistant from Hollywood, Florida; and 
Steekena Rollins, a day-care service provider from Chicago, 
Illinois. All three spent their entire life savings to buy into 
the American dream of home ownership, only to have their 
experience transformed into a nightmare. As Chairman Collins 
said in her opening statement,

        ``I find it very troubling that so many citizens in our 
        Nation's cities have been victimized by the predatory 
        practices of unscrupulous real estate agencies, 
        appraisers, and lenders. But what I find most appalling 
        is that the Federal Government has essentially 
        subsidized much of this fraud.''

    At the request of Senator Collins and Representative Rick 
Lazio (R-NY), GAO prepared a report, entitled ``Single Family 
Housing: Stronger Oversight of FHA Lenders Could Reduce HUD's 
Insurance Risk.'' Stanley Czerwinski--accompanied by Robert 
Procaccini, Assistant Director for FHA Insurance Programs, and 
Paul Schmidt, Assistant Director for Single-Family Housing 
Programs--appeared before the Subcommittee in 2000 to discuss 
GAO's findings.
    As the GAO officials made clear, FHA is the principal 
provider of Federal mortgage insurance, and is also the major 
lending source for first-time, low-income, and minority home 
buyers. As such, the agency relies on approximately 10,000 
lenders to carry out its mission, and about 2,900 of those 
lenders are granted ``Direct-Endorsement'' (DE) authority. This 
means that these lenders can gather and process loan 
information, underwrite the loans, and make eligibility 
determinations, all without prior HUD review.
    Given HUD's reliance on private lenders and the authority 
they are given to act on HUD's behalf, oversight is essential. 
GAO's review found problems with HUD's oversight of the 
program. Specifically, GAO identified problems in three 
particular areas: (1) HUD's process for granting FHA-approved 
lenders DE authority provides only limited assurance that the 
lenders are in fact qualified; (2) HUD's monitoring of lenders 
does not adequately focus on the lenders and loans that pose 
the greatest insurance risks to the Department; and (3) HUD has 
not taken sufficient steps to hold lenders accountable for poor 
performance and program violations.
    Senator Collins noted that the problems GAO identified in 
this report were long-standing issues of which HUD had already 
been advised in prior audits and reports. Despite this history 
of studies calling attention to the problem, however, no 
apparent progress had been made to remedy the deficiencies. In 
1993, for example, HUD's Office of the Inspector General (OIG) 
completed an audit of FHA's single-family mortgage program and 
found that HUD's post-endorsement reviews did not consistently 
ensure quality underwriting. In 1997, the GAO evaluated the 
appraisal process and found that HUD was not adequately 
monitoring appraisers--as well as that the agency was not 
moving effectively against faulty appraisers. Finally, in 1999, 
the GAO issued yet another report on the subject. Entitled 
``Single-Family Housing: Weaknesses in HUD's Oversight of the 
FHA Appraisal Process,'' this study similarly found that: (a) 
HUD was still not doing a good job monitoring the performance 
of appraisers; (b) HUD was not holding appraisers accountable 
for the quality of their appraisals, and (c) the Department had 
limited assurance that its appraisers were in fact 
knowledgeable.
    HUD was made aware on numerous occasions of these problems 
and vulnerabilities in its FHA program, and of the Department's 
faulty oversight of mortgage programs. Instead of cracking down 
on poor performing lenders, however, the agency did little or 
nothing to stop such abuses. The unfortunate result of this 
failure is that unscrupulous sellers, effectively subsidized by 
FHA-backed loans, made property-flipping victims out of many of 
the very people whom HUD's program was supposed to help attain 
the American dream of homeownership.
    The victims of property flipping depended on HUD to protect 
them from the predatory sales and lending practices revealed by 
the Subcommittee's investigation. Unable to obtain the 
conventional mortgages needed to buy their homes, these low-
income Americans had no alternative but to turn to FHA-
supported programs in order to gain any access to the housing 
market. HUD has a duty to protect such home buyers and to help 
keep them from becoming the victims of fraudulent sales and 
lending practices. HUD also has an obligation as to safeguard 
the integrity of the insurance fund, which could be imperiled 
should sloppy oversight of loan-guarantee practices leave the 
fund responsible for covering the cost of many millions of 
dollars' worth of bad loans. Unfortunately, HUD failed to 
fulfil these responsibilities. Moreover, the Department 
mischaracterized the assistance it was able to provide to those 
home buyers who fell victim to fraudulent practices in the 
poorly-overseen lending environment that HUD had for so long 
permitted to exist.

C. Gas Prices: How Are They Really Set? (April 29, 2002) (Report 
        prepared by the Majority Staff and reprinted in S. Hrg. 107-
        509)

    On April 29, 2002, the Subcommittee issued a 400-page 
report, prepared by the Majority staff after a year-long 
investigation, entitled, ``Gas Prices: How Are They Really 
Set?'' This report showed how oil industry mergers, refinery 
closings, and increasingly ``tight'' gasoline supplies had 
increased market concentration and given some refiners 
sufficient market power to reduce gasoline supplies and 
increase gasoline prices. Other factors leading to higher 
prices and spikes in the Midwest included regional pipeline 
limitations, price variations from different fuels, and the 
practice of ``parallel pricing'' in which retailers looked to 
competitors to set gasoline prices.
    The report was based upon a review by Subcommittee staff of 
over 250,000 documents; analysis of market data provided by the 
Energy Information Administration and wholesale and retail 
price data purchased from the Oil Price Information Service; 
and interviews with oil companies, distributors, service 
station owners and dealers, trade associations, economists and 
other experts. The report included an analysis of the 
operations and structure of the oil industry, with particular 
focus on downstream activities from the refinery to the pump, 
and on three regions: The West Coast (California in 
particular); the Midwest (Michigan, Ohio and Illinois, in 
particular); and the East Coast (Maine and the Washington, D.C. 
area, in particular).
    The report showed that, over the prior 3-year period, 
gasoline prices had increased significantly and showed greater 
volatility and more ``extraordinary'' price spikes than in past 
years. It found that mergers in the oil industry over the last 
few years and the closing of many refineries over the past 20 
years had increased concentration in the refining industry. It 
also found that gasoline supplies had dropped overall, while 
demand had increased, resulting in an increasingly ``tight'' 
market that was increasingly sensitive to even minor supply 
disruptions. In certain regions of the United States, the 
report determined that the refining market was so concentrated 
and the gasoline market was so finely balanced, that oil 
companies could act to limit supply and from time to time spike 
prices to maximize profits, without little or no challenge due 
to insufficient competition. The report also presented internal 
oil company documents showing that the oil companies viewed it 
to be in their economic interest to keep gasoline inventories 
low and the supply and demand balance tight, to maximize prices 
and profits.
    The report also documented a variety of specific gasoline 
pricing practices. It found, for example, that oil companies do 
not set wholesale or retail prices based solely upon the cost 
to manufacture and sell gasoline; rather these prices are set 
on the basis of market conditions, including the prices of 
competitors. The report found, for example, that most oil 
companies and gasoline stations tried to keep their prices at a 
constant price differential with respect to one or more 
competitors, leading to prices in specific markets that tended 
to go up and down together. The report included evidence of one 
such leader-follower pricing pattern in Michigan and Ohio in 
2001, in which one company routinely bumped up the price of 
gasoline on Wednesdays or Thursdays and a specific competitor 
then routinely followed.
    The report also documented oil company use of a pricing 
system referred to as ``zone pricing'' which allowed oil 
companies to charge the highest possible amount for their 
gasoline in a given area. The report found that some oil 
companies, using a highly sophisticated analysis of market and 
consumer factors, divided a State or region into zones, each 
representing a particular market. Competition was then limited 
to the stations within each zone. For example, if most people 
bought gasoline on their way home from work instead of on their 
way to work, a station on one side of a rush hour street may be 
treated as in one zone and the same brand station on the other 
side of the street in another zone. The oil company would then 
charge those two gas stations different prices for their 
gasoline, because the station on the side of the street with 
easy access for evening rush hour traffic might be able to get 
a higher price for its gas than the station on the other side 
of the street.
    Another pricing practice documented in the report involved 
how gasoline station owners set their retail prices. The report 
showed that for those stations that leased from a major oil 
company (about one-fourth of the 117,000 branded stations) the 
oil company recommended to the station dealer a retail price. 
Evidence supplied by several dealers indicated that if they did 
not charge their retail customers the recommended price, the 
next delivery of gasoline from the oil company would reflect 
any price increase instituted by the dealer so that the dealer 
would not earn any additional profit. For example, if a dealer 
priced the gasoline at $1.40/gallon when the oil company 
recommended $1.35, the next delivery of gasoline to the station 
(and deliveries are sometimes daily for busy stations) would 
cost an additional 5 cents per gallon. The practical effect was 
pressure on the dealer to conform with the recommended retail 
price. The report concluded that, in these situations, it was 
the major oil company rather than the local dealer that 
determined the gasoline price and benefitted from higher prices 
and profit margins.
    The report also examined other factors affecting gasoline 
prices, including the advent of so-called ``hypermarkets'' in 
which large discount stores like Wal-Mart and Cosco sell the 
lowest priced gasoline in a market; the use of gasoline storage 
facilities and pipelines by some oil companies to limit 
supplies and market competition; and the impact of boutique 
fuels required in some locations to address environmental 
concerns.
    The report was released in connection with Subcommittee 
hearings held on April 30 and May 2, 2002, examining the 
pricing retail gasoline.

D. Phony Identification and Credentials Via the Internet (February 4, 
        2002) (S. Rept. 107-133)

    On February 4, 2002, the Subcommittee issued a report, 
entitled ``Phony Identification and Credentials Via the 
Internet'' which highlighted both the wide variety of false 
identification materials and credentials available over the 
Internet, and the ways in which those individuals seeking to 
manufacture and distribute phony identification are able to use 
Internet-age technology. The report includes case studies of 
several individuals involved in manufacturing, distributing and 
purchasing false identification materials.
    The report was based on the Subcommittee's 5-month 
investigation and subsequent hearing held in May 2000 during 
Senator Collins' chairmanship. The Subcommittee's work led to 
the passage of legislation authored by Senator Collins, the 
Internet False Identification Prevention Act of 2000, designed 
to stem the spread of false identification obtained over the 
Internet.
    The proliferation of false identification has become a 
serious public safety issue. False identification documents and 
credentials can enable criminals to commit a host of crimes 
ranging from identity theft to bank and credit card fraud and 
allow them to fund larger and more dangerous criminal 
activities. Phony identification can also enable criminals to 
obtain bona fide, yet unsupported and unauthorized, 
identification documents such as driver's licenses. Moreover, 
criminals may be able to evade law enforcement by hiding behind 
their false identities. Failing to curb the spread of false 
identification can have grave consequences, as evidenced by the 
apparent use of false identification and immigration documents 
by some associates of the al Qaeda terrorist organization.
    ``While the manufacture, distribution and use of phony 
identification are crimes in and of themselves, phony 
identification and credentials are nearly always used to commit 
other more serious crimes ranging from identity theft to bank 
and credit card fraud. Criminals may also be able to evade law 
enforcement by hiding behind their false identities,'' said 
Senator Collins. ``As part of our war on terrorism, it is vital 
that we do all we can to curb the availability of false 
identification. I hope this report will help focus law 
enforcement's attention on that effort.''
    Technological developments during the past few years have 
significantly increased the dangers associated with the 
production and marketing of fake identification documents. 
Today, both the necessary skills and materials are well within 
the reach of a growing number of people. Moreover, it is 
becoming even easier to obtain and create false identification 
documents, which can then be used for a wide variety of 
improper and illegal purposes.
    False identification materials are distributed over the 
Internet through a number of methods. Some websites offer to 
make identification documents for customers which are then 
delivered by mail. Others offer the computer files, known as 
``templates,'' necessary to manufacture false identification 
documents. Customers may purchase access to the templates and 
download them to their own computers, or purchase a computer 
disk containing the template files. Still other operators 
simply offer the templates for free.
    The Subcommittee found that the Internet has become a 
significant source of illegal identification documents, both 
actual identity documents containing false information and 
templates that can be used to create fake documents. These 
include driver's licenses from all 50 States, birth 
certificates, Social Security cards, military identification 
cards, student identifications, diplomas, press credentials, 
and Federal agency credentials such as those used by the FBI 
and CIA. The Subcommittee also found products such as Social 
Security number generators, bar code generators, and 
instructions for creating holograms. ``As we learned at our 
hearing, the quantity and quality of the counterfeit 
identification documents that can be obtained through the 
Internet is astounding,'' said Senator Collins.
    As a result of its investigation, the Subcommittee drew 
three general conclusions. First, many Internet sites offer a 
wide variety of phony identification documents, some of which 
are of very high quality and include security features commonly 
used by government agencies to deter counterfeiting.
    Second, the disclaimers that can be found on many websites 
are at odds with the marketing strategy pursued by the 
operators of those websites. The Subcommittee found that 
operators frequently attempted to shield themselves by claiming 
that their products were ``for novelty purposes only.'' At the 
same time, however, operators commonly implied that their 
products were so authentic in appearance as to be illegal--
something they clearly considered to be a marketing asset.
    Third, the Internet has played a leading role in fostering 
the manufacture and the sale of high quality false 
identification, and has made these products available to a vast 
customer base with virtual anonymity for both the sellers and 
the buyers. This has, in turn, presented significant challenges 
for law enforcement.
    Since the Subcommittee began its investigation most of the 
individuals examined have removed their websites from the 
Internet or have curtailed their activities. The Subcommittee 
made referrals of potential violations of Federal and State law 
to the appropriate members of the law enforcement community, 
urging authorities to investigate further the activities of 
several individuals involved with manufacturing and 
distributing false identification documents. Nevertheless, 
operators continue to spring up to take the places of those who 
have closed their websites and offer false identification and 
credentials over the Internet, although most of these new 
operators are located abroad.

E. The Role of the Board of Directors In Enron's Collapse (July 8, 
        2002) S. Prt. 107-70

    On July 8, 2002, the Subcommittee issued a bipartisan 
report with findings and recommendations regarding ``The Role 
of the Board of Directors In Enron's Collapse.'' This report 
was the first of two issued by the Subcommittee during the 
course of its Enron investigation. It cited and was based upon 
evidence collected by the Majority and Minority staffs, working 
together, to review hundreds of boxes of documents and conduct 
interviews of 13 current and former members of the Enron Board 
members, as well as other Enron personnel, Arthur Andersen 
accountants, and experts in corporate governance and 
accounting. It followed a Subcommittee hearing on May 7, 2002.
    The Subcommittee concluded in the report that the Enron 
Board had failed to safeguard Enron shareholders and 
contributed to the collapse of the seventh largest public 
company in the United States by allowing Enron to engage in 
high-risk accounting, inappropriate conflict of interest 
transactions, extensive undisclosed off-the-books activities, 
and excessive executive compensation. The Subcommittee also 
found that the Board had witnessed numerous indications of 
questionable practices by Enron management over several years, 
but chose to ignore them to the detriment of Enron 
shareholders, employees, and business associates. The report 
detailed evidence documenting numerous failures of duty by 
Enron directors including the failure to stop Enron from using 
misleading accounting; the failure to protect Enron 
shareholders from unfair dealing in the LJM partnership in 
which an Enron officer had a personal financial interest; the 
failure to ensure adequate public disclosure of material off-
the-books liabilities; the failure to ensure the independence 
of the company's auditor, Arthur Andersen; and the failure to 
monitor or halt abuse by Board Chairman and Chief Executive 
Officer Kenneth Lay of a company-financed, multi-million 
dollar, personal credit line.
    The report presented two sets of bipartisan Subcommittee 
recommendations to strengthen internal and external oversight 
of U.S. publicly traded corporations to stop corporate 
misconduct. The first set of recommendations concentrated on 
strengthening internal Board oversight. They included 
recommendations that Board members at publicly traded companies 
prohibit high-risk accounting practices, including significant 
off-the-books activity used to make the company's financial 
condition appear better than it is; prohibit the company's 
outside auditor from also providing internal auditing or 
consulting services and auditing its own work for the company; 
and prohibit conflict of interest arrangements that allow 
company transactions with a business owned or operated by 
senior company personnel. The Subcommittee also recommended 
that corporate Boards act to prevent excessive executive 
compensation, including by exercising ongoing oversight of 
officer and director compensation, ending company-financed 
loans to officers and directors, and reducing stock option 
compensation that encourages improper accounting or other 
misconduct to increase the company stock price for personal 
gain.
    The second set of Subcommittee recommendations concentrated 
on the Securities & Exchange Commission and the self-regulatory 
organizations, including the national stock exchanges, and 
called on them to strengthen corporate governance requirements 
for publicly traded corporations. These bipartisan Subcommittee 
recommendations included calling for stronger statutory, 
regulatory and listing requirements for independent directors, 
including by requiring a majority of the outside directors to 
be free of material financial ties to the company; for 
competent audit committees, including by requiring an audit 
committee chair who has financial expertise and a committee 
charter which requires oversight of the company's financial 
statements and accounting practices and authorizes the 
committee's selection and retention of the outside auditor; and 
for independent auditors, including by prohibiting the 
company's outside auditor from simultaneously providing the 
company with internal auditing or consulting services and from 
auditing its own work for the company.
    Many of the Subcommittee's recommendations for stronger 
corporate governance requirements were included in the 
subsequently enacted Sarbanes-Oxley Act and in new regulatory 
and listing requirements issued by the Securities & Exchange 
Commission and the New York Stock Exchange.

F. Fishtail, Bacchus, Sundance, and Slapshot: Four Enron Transactions 
        Funded and Facilitated By U.S. Financial Institutions (January 
        2, 2003) S. Prt. 107-82

    On January 2, 2003, the Subcommittee issued a bipartisan 
report, entitled ``Fishtail, Bacchus, Sundance, and Slapshot: 
Four Enron Transactions Funded and Facilitated By U.S. 
Financial Institutions.'' This report was the second of two 
issued by the Subcommittee in the course of its year-long Enron 
investigation and presented findings and recommendations 
relative to four Enron transactions that were the focus of a 
Subcommittee hearing on December 11, 2002.
    The report presented evidence obtained during a bipartisan 
Subcommittee investigation of the role played by certain major 
U.S. financial institutions in Enron's collapse and, in 
particular, with respect to four multi-million dollar 
structured finance transactions examined at the December 
hearing. It presents evidence from the December hearing which, 
when combined with evidence from earlier Subcommittee hearings 
in July, shows that several of the largest U.S. financial 
institutions were knowingly participating in, and at times 
designing, advancing and profiting from, complex financial 
transactions using deceptive accounting or tax strategies.
    All four of the transactions detailed in the report related 
to a new business venture by Enron involving pulp and paper 
trading. All four had taken place over a 6-month period 
beginning in December 2000 and ending in June 2001. All four 
had been financed primarily by the Salomon Smith Barney unit of 
Citigroup or by Chase. The report presented evidence showing 
that Citigroup and Chase actively aided Enron in executing the 
four transactions, despite knowing the transactions utilized 
deceptive accounting or tax strategies, in return for 
substantial fees or favorable consideration in other business 
dealings.
    The Fishtail, Bacchus, and Sundance transactions were 
structured to appear to bring new investment into Enron's pulp 
and paper business venture. In reality, these complex financial 
deals enabled Enron to use a $200 million Citigroup loan in a 
sham asset sale to boost its year-end cash flow and earnings, 
and then quietly return the funds via Sundance. The report 
concluded that, without Citigroup's participation and 
willingness to provide the required financing, Enron would not 
have been able to complete these deceptive transactions.
    The Slapshot transaction, which was designed by Chase and 
sold to Enron for $5 million, was a tax avoidance scheme that 
Enron used to claim an estimated $60 million in Canadian tax 
savings and $65 million in financial statement benefits. 
Slapshot took place on June 22, 2001, and involved a complex 
array of structured finance arrangements utilizing loans, 
funding transfers, and transactions involving Chase and Enron 
affiliates in two countries. The report described how, in 
essence, Slapshot took a valid $375 million loan issued by a 
consortium of banks to an Enron affiliate, combined it with a 
$1 billion sham loan issued by a Chase-controlled shell 
company, and then used the sham loan to inflate its Canadian 
tax deductions and U.S. earnings.
    In the report, the Subcommittee made several bipartisan 
recommendations to strengthen Federal oversight of financial 
institutions and stop them from helping U.S. companies engage 
in deceptive accounting and tax transactions. These 
recommendations focused in particular on coordinated action by 
the Securities & Exchange Commission and bank regulators to 
bridge a current gap in Federal oversight that exists because 
the SEC does not generally regulate banks, and bank regulators 
do not generally regulate accounting practices. The 
Subcommittee recommendations included calling for a joint 
Federal review of structured finance products and transactions 
to identify those that facilitate deceptive accounting, an SEC 
policy statement making it clear that the SEC would take 
enforcement action against a financial institution that offers 
deceptive financial products or participates in deceptive 
transactions, and a policy statement by bank regulators making 
it clear that bank examiners, as part of their routine bank 
examinations, may evaluate a bank's structured finance 
activities and declare problematic products or activities an 
unsafe and unsound banking practice.
    The requested review of structured finance products and 
transactions had already been initiated by the Federal Reserve 
which promised to report on its findings. Since the report, the 
SEC has taken enforcement action against a financial 
institution that assisted a company other than Enron to engage 
in deceptive accounting. Chase announced its intention to 
discontinue sales of the tax product involved in the Slapshot 
transactions, and Citigroup announced a new corporate policy to 
prevent Citigroup's participation in any transaction in which 
the transaction's net effect is not accurately disclosed to a 
company's investors and analysts. Investigations by the SEC, 
U.S. Department of Justice, and Canadian tax authorities into 
the transactions described in the report may also be underway.

              V. Requested and Sponsored Reports From GAO

    In connection with its investigations, the Subcommittee 
makes extensive use of the resources and expertise of the 
General Accounting Office (GAO), the Offices of Inspectors 
General (OIGs) at various Federal agencies, and other entities. 
During the 107th Congress, the Subcommittee requested a number 
of reports and studies on issues of importance to Congress and 
to U.S. consumers. Among these reports were the following:

(1) Money Laundering: Oversight of Suspicious Activity Reporting at 
        Bank-Affiliated Broker-Dealers Ceased (GAO-01-474) March 22, 
        2001

(2) Anti-Money Laundering: Efforts in the Securities Industry (GAO-02-
        111) October 10, 2001

(3) Money Laundering: Extent of Money Laundering through Credit Cards 
        Is Unknown (GAO-02-670) July 22, 2002

    In these three reports, completed at the request of Senator 
Levin, GAO examined issues related to the money laundering 
investigation being conducted by the Subcommittee. The first 
two reports identified gaps and inadequacies in current anti-
money laundering efforts by the U.S. securities industry, while 
the third looked at money laundering through the use of credit 
cards.
    In connection with the first two reports, GAO surveyed 
3,015 broker-dealers and 310 direct-marketed mutual fund groups 
in the United States to determine whether these firms had 
voluntary anti-money laundering measures in place, such as 
procedures to verify customers' identities, monitor account 
transactions for possible money laundering, and report 
suspicious activity to law enforcement. The GAO survey 
estimated that only 17 percent of broker-dealers and 40 percent 
of mutual fund groups reported having such voluntary measures 
in place; an estimated 83 percent of the broker-dealers and 60 
percent of the mutual fund groups, totaling more than 2,600 
firms, did not have these measures. The GAO report, thus 
established that thousands of U.S. securities firms did not 
have even basic anti-money laundering controls in place, while 
also noting that such controls were not legally required at the 
time of the survey. The GAO report also described the concern 
of U.S. law enforcement that criminals ``may increasingly 
attempt to use the securities industry to launder money,'' and 
included a list of 15 U.S. criminal and civil cases since 1997, 
involving money laundering through brokerage or mutual fund 
accounts, including a May 2000 indictment of a former prime 
minister of Ukraine, Pavel Lazarenko, who allegedly laundered 
$114 million through U.S. bank and brokerage accounts.
    By identifying gaps and inadequacies in current anti-money 
laundering laws when applied to funds entering the U.S. 
financial system through securities accounts, these GAO reports 
provided support for legislative efforts in the USA Patriot 
Act, H.R. 3162, to expand these laws to apply to the securities 
industry. Title III of the USA Patriot Act, signed into law by 
President Bush on October 26, 2001, marked a major shift in 
U.S. anti-money laundering statutes by applying their 
requirements not only to U.S. banks, but also to U.S. 
securities firms and other U.S. financial institutions. For 
example, Title III of the USA Patriot Act, for the first time, 
required all U.S. securities firms to establish anti-money 
laundering programs, verify the identity of their customers, 
exercise due diligence before opening accounts for foreign 
financial institutions, bar accounts for foreign shell banks, 
and report suspicious activity to law enforcement.
    The third GAO report identified issues related to money 
laundering vulnerabilities in the credit card industry, 
including the use of credit cards issued by foreign offshore 
banks to enable U.S. citizens or businesses to obtain access to 
funds in accounts opened by these offshore banks. Among other 
issues, the report examined the process by which foreign 
offshore banks were able to convince major U.S. enterprises 
like Master Card and Visa to authorize these banks to issue 
brand name credit cards. These and other credit card money 
laundering concerns are addressed, in part, by Title III of the 
USA Patriot Act which expanded U.S. anti-money laundering laws 
to apply to the credit card industry for the first time. This 
change in the law has prompted major U.S. credit card 
associations, companies, and banks to begin to develop anti-
money laundering programs. The Internal Revenue Service has 
also begun a major enforcement effort to identify potentially 
millions of U.S. citizens using credit cards to obtain access 
to offshore funds in foreign bank accounts that are not listed 
on their tax returns and may facilitate tax evasion.

(4) Criminal Debt: Oversight and Actions Needed to Address Deficiencies 
        in Collection Processes (GAO-01-664) July 16, 2001

(5) Civil Fines and Penalties Debt: Review of CMS' Management and 
        Collection Processes (GAO-02-116) December 31, 2001

(6) Civil Fines and Penalties Debt: Review of OSM's Management and 
        Collection Processes (GAO-02-211) December 31, 2001

(7) Civil Fines and Penalties Debt: Review of U.S. Customs Service's 
        Management and Collection Processes (GAO-02-655) May 31, 2002

    In these four reports, GAO examined a variety of debt 
collection issues of interest to Senator Collins. Since October 
1985, the balance of uncollected criminal debt has grown from 
$260 million to more than $13 billion in 2001. The U.S. Courts 
have responsibility for receipting and recordkeeping criminal 
debt and the Department of Justice is responsible for 
collecting the debt.
    The first report identified four key factors that have 
contributed to the significant growth of uncollected criminal 
debt. The factors are: (1) the nature of the debt, in that it 
involves criminals who may be incarcerated or deported or who 
have minimal earning capacity; (2) the pay, as required by the 
Mandatory Victims Restitution Act of 1996; (3) interpretation 
by the Financial Litigation Units of payment schedules set by 
judges from which limit collection activities; and (4) State 
laws that may limit the type of property that can be seized and 
the amount of wages that can be garnished.
    The second report focused on the debt collection processes 
and procedures used by the Department of Health and Human 
Services' (HHS) Centers for Medicare and Medicaid Services 
(CMS). The primary reason for the growth of CMS' civil monetary 
penalties (CMP) receivables was the expansion of fraud and 
abuse detection activities from fiscal year 1995 through fiscal 
year 1997. GAO's analysis of CMS' CMP receivable data revealed 
similar financial accountability and reporting issues as those 
identified for non-CMP receivables by CMS' external financial 
statement auditors. GAO identified unreconciled differences of 
tens of millions of dollars in the CMP receivables balances 
reported by HHS and CMS for fiscal years 1997 through 1999, and 
an unreconciled net difference of about $22 million between the 
CMP receivables balance in CMS' general ledger and the detailed 
subsidiary systems as of September 30, 2000.
    The third report concentrated on the debt collection 
processes and procedures used by the Department of the 
Interior's Office of Surface Mining (OSM). GAO reported that 
the low collection rates and significant write-offs of OSM's 
civil fines and penalties is due to the poor financial 
condition of certain debtors. Most uncollected fines and 
penalties are associated with mining companies that are not 
financially viable.
    In the fourth report, the GAO reviewed the Customs 
Service's management of and practices for collecting civil 
fines and penalties debt. The GAO found that the gross debt 
more than tripled from the beginning of fiscal year 1997 to the 
end of fiscal year 2000, rising from $218.1 million as of 
October 1, 1996, to $773.6 million as of September 20, 2000. 
The primary reason for the growth in Customs' reported 
uncollected debt was the bankruptcy of a Customs' broker in 
2000. The GAO determined that the agency can strengthen some of 
its debt collection policies and procedures by enhancing them 
and better adhering to them.

(8) Illegal Aliens: INS's Processes for Denying Aliens Entry Into the 
        United States (GAO-02-220T) November 13, 2001

    In this report, completed at the request of Senator Levin, 
GAO examined certain border entry procedures for aliens seeking 
entry into the United States. GAO also reviewed INS policy and 
statistics on the attendance of certain groups of aliens at 
removal hearings. This report provided data and analysis that 
was considered in connection with a Subcommittee hearing on 
November 13, 2001, entitled ``Review of INS Policy on Releasing 
Illegal Aliens Pending Deportation,'' described earlier.

(9) Multifamily Housing: Improvements Needed in HUD's Oversight of 
        Lenders That Underwrite FHA-Insured Loans (GAO-02-680) July 19, 
        2002

    In this report, at the request of Senator Collins, GAO 
examined several HUD mortgage lending practices. Each year, the 
Federal Housing Administration (FHA) insures billions of 
dollars in multifamily housing mortgage loans to help 
construct, rehabilitate, purchase, and refinance apartments and 
healthcare facilities. However, the Department of Housing and 
Urban Development (HUD) lacks assurances that the lenders 
approved for the Multifamily Accelerated Processing (MAP) 
program always meet all of HUD's qualifications. HUD's guidance 
requires prospective lenders to submit documents showing that 
they are financially sound, have a satisfactory lending record, 
and have qualified underwriters. GAO found that HUD did not 
always comply with, or effectively implement, controls and 
procedures for reviewing and monitoring MAP lenders' 
underwriting of loans.

(10) Critical Infrastructure Protection: Commercial Satellite Security 
        Should Be More Fully Addressed (GAO-02-781) August 30, 2002

    In this report, at the request of Senator Collins, GAO 
examined homeland security issues related to commercial 
satellites. Government and private-sector entities rely on 
satellites for services such as communication, navigation, 
remote sensing, imaging, and weather and meteorological 
support. Disruption of satellite services, whether intentional 
or not, can have a major adverse economic impact. When using 
commercial satellites, Federal agencies reduce risks by 
securing data links and ground stations that send and receive 
data. However, Federal agencies do not control the security of 
the tracking and control links, satellites, or tracking and 
control ground stations, which are typically the responsibility 
of the satellite service provider. It is important to the 
Nation's economy and security to protect against attacks on its 
computer-dependent critical infrastructures, many of which are 
privately owned. In light of the Nation's growing reliance on 
commercial satellites to meet military, civil, and private 
sector requirements, omitting satellites from the Nation's 
approach to protecting critical infrastructure leaves an 
important aspect of the country's infrastructures without 
focused attention.

(11) Department of Education: Guaranteed Student Loan Program 
        Vulnerabilities (GAO-03-268R) November 21, 2002

(12) Purchases of Degrees from Diploma Mills (GAO-03-269R) November 21, 
        2002

    In these two reports, at the request of Senator Collins, 
GAO examined issues related to fraudulent educational degrees. 
The first report investigated the weaknesses in the Department 
of Education's administration of student loans for 
postsecondary education under the Federal Family Education Loan 
(FFEL) program. As a result of the investigation, GAO exposed 
the vulnerabilities in the program by setting up a fictitious 
school and obtaining approval for students loans totaling 
$55,000 on behalf of three fictitious students.
    The second report examined diploma mills that illegally 
sell fraudulent academic degrees to individuals that use them 
to gain positions and increase income based upon the documents. 
GAO successfully purchased a degree from a diploma mill to 
demonstrate how easily one can be obtained. The owner of a 
mill, Degrees-R-Us, was questioned and admitted to the sales of 
approximately one hundred fraudulent degrees over the past 2 
years when his business began.

(13) Homeland Security: Information Technology Funding and Associated 
        Management Issues (GAO-03-250) December 13, 2002

    In this report, completed at the request of Senators 
Collins and Levin, GAO identified all pending issues from 
earlier GAO reports related to information technology equipment 
and programs at the 22 agencies being transferred to the new 
U.S. Department of Homeland Security. This report was requested 
by the Senators to facilitate the integration and improvement 
of computer-related technologies at the new Department.
      

                                 
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